Local manufacturers under the aegis of Manufacturers Association of Nigeria (MAN) have reported that the non-availability of foreign exchange (forex) is delaying the shipment of key machines meant for production of goods despite getting the nod from their foreign technical partners. In addition, they expressed their pessimism that the introduction of 10 per cent charges to facilitate the Central Bank of Nigeria (CBN)’s 100-for-100 Policy on Production and Productivity was another hell on their bottom-lines and revenue projections following the effect the policy is having on cost of production and ease of doing business in the country. A reliable source in MAN, who spoke to New Telegraph in Lagos, on behalf of MAN members, explained that many of them were on hand brake at the moment over the adverse effects of forex squeeze on manufacturing, with the exchange rate hitting N800 to the dollar.
He said that since it wasn’t easy getting facility from the CBN and commercial banks amid the rigorous processing, many MAN members decided to look off-shore to get facility to pay for machine importation in order to continue production under a harsh environment. Particularly, the source explained that these multinationals had given some of them the clearance to bring those key manufacturing machines into Nigeria, but non-availability of forex to facilitate the imports has been a key challenge facing many of them at the moment. According to the manufacturers, it is time for the Federal Government, especially the Minister of Industry, Trade and Investment, to salvage the forex situation by talking to the CBN to prioritise manufacturing sector in forex disbursement.
The source said: “We already got facility to import machines from the multinationals for production of goods in Nigeria, but we don’t have foreign exchange (FX) to buy the machines. “For example, if I can get foreign exchange for N450 to a $, by my calculation, in the black market, it’s almost N800 to a dollar. How am I going to pay back? “How am I going to make profit? Then in the Central Bank of Nigeria again, it is another hell, the 100 by 100 facility as at yesterday, I was told we will be paying 10 per cent to facilitate it. “Since we have the Minister of Industry, Trade and Investment with us, I think we should not have problems sourcing foreign exchange from the Central Bank of Nigeria because of the crucial role manufacturing sector is playing in our GDP.” Immediate past President of MAN, Engr. Mansur Ahmed, also explained that as the CBN embarks on monetary tightening to tame inflation, it should ensure that targeted concessionary credit to the private sector is sustained for MSMEs. Ahmed told our correspondent that the CBN needed to gradually transition to a unified exchange rate system and allow for a market reflective exchange rate. In addition, the industrialist added the CBN also needed to roll out more friendly supply-side policies to boost productive sectors, bolster investor confidence and help attract foreign investment inflows into the economy. It would be recalled that the Central Bank of Nigeria had disbursed N68.13 billion to beneficiaries under its 100- for-100 Policy on Production and Productivity since the commencement of the intervention recently. According to the CBN Governor, Godwin Emefiele, “Under the 100 for 100 Policy on Production and Productivity, the bank has released N9.98 billion for five projects, bringing the cumulative disbursements under the intervention to N68.13 billion for 48 projects, comprising 26 in manufacturing, 17 in agriculture, three in healthcare and two in the services sector,” he said. According to the guidelines for the implementation of the initiative, the CBN fixed the maximum loan amount that a participant could get at N5 billion. The CBN stated in the guideline that the initiative would select 100 private sector companies with projects that have potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.