“Manufacturing Firms to Close Down on Raw Material Scarcity” – MAN

Manufacturers Association of Nigeria, MAN, has expressed worry that many of its member companies will close down production at the end of the first quarter of 2016 as a result of raw materials scarcity.

President of MAN, Frank Udemba Jacobs, said that since the introduction of foreign exchange restrictions policy by the apex bank almost eight months ago, their members find it difficult to import their raw materials.

“The recent policy statement of the Central Bank of Nigeria (CBN) has not really augured well for manufacturers. To an extent, we seem to agree with the reasons behind the decision of the CBN, mainly the dwindling crude oil price in the international market but sometimes, the policy seems to be like throwing the child out along with the bath water, in the sense that our members raw materials could not be purchased or sourced.

The policy denied them foreign exchange to import their raw materials and we are concerned that before the end of this quarter, it is possible that many of these companies will be out of business, because by then, they would have run out of their raw materials, most of them have come to make presentation to us that they are going to close down unless there is a change in the policy from the CBN,” he said.

According to him “the recent statement by the CBN that money deposit banks can now receive foreign exchange into domiciliary account of customers; it’s cheering news in the sense that some of the smaller industries might be able to transfer money in order to buy their raw materials.

“The decision also to stop the funding of the exchange is again a good decision, it’s a step in the right direction, we are hoping that that same funds that are saved should be channeled into the productive sector by allowing the real sector to get their foreign exchange to import their raw materials, that is one of their major challenges.”

“We are also faced with the challenge of change in government, because normally when government is changed like it happened in Nigeria last year, it takes a long time for new policy thrust of the new government to come out especially with the long delay in the appointment of the cabinet, all those things throw the economy into a state of uncertainty for a very long time and it becomes difficult for my members to predict the economy to be able to plan their businesses.