The Manufacturers Association of Nigeria (MAN) has disclosed that its members suffered staggering losses amounting to at least N1.5 trillion over the past six months due to forex-related transactions.
MAN’s Director-General, Segun Ajayi-Kadir, revealed the dire financial toll faced by manufacturers amidst ongoing forex challenges in the country.
Ajayi-Kadir’s revelation coincided with manufacturers’ dissent against the Central Bank of Nigeria’s assertion that all valid forex requests had been resolved. Many manufacturers still await the clearance of pending dollar requests, some of which have remained unattended for an extended period.
The CBN had recently announced the successful clearance of all valid foreign exchange backlogs, settling a legacy burden amounting to $7 billion. However, MAN’s President, Francis Meshioye, contradicted this claim, stating that forex requests from manufacturers remained unresolved, impacting businesses negatively.
To address these concerns, a stakeholder meeting was convened by the Minister of Industry Trade and Investment on March 21, 2024, but failed to comprehensively address the issues raised by affected businesses.
Ajayi-Kadir detailed that the N1.5 trillion losses incurred by manufacturers were primarily due to interest payments resulting from the CBN’s delay in settling outstanding forex forward contracts. Additional factors contributing to the losses included excess payments for import duty assessment and the rapid depreciation of the naira in the first quarter of the year.
The prolonged delay in resolving these issues has hindered manufacturers’ ability to import raw materials and fulfill production obligations, exacerbating financial strain within the sector. Many manufacturers are unable to access new raw materials due to outstanding dollar debts, further impacting their operations and profitability.
MAN emphasized the urgency of finding a resolution to the unsettled forex forwards, suggesting further consultation with the National Assembly to explore viable solutions. Ajayi-Kadir also urged the CBN to reassess pending requests to avoid potential litigation and mitigate the adverse effects on the manufacturing sector and the national economy.
With factories facing imminent closure and the sector in a state of distress, MAN underscored the importance of prompt action to address the ongoing forex crisis and prevent further economic ramifications.
