“We Lost N1.46trillion in 6 Months to Forex Restriction” – Organized Private Sector

The 2015 financial year was one of the most challenging for the Nigeria’s Organized Private Sector (OPS) as difficulties in the business environment, foreign exchange crisis, funding constraints, policy inconsistency among other glitches almost stifled many operators.

Particularly, the last six months was considered as the most difficult period for the operators, who, according to the Lagos Chamber of Commerce and Industry (LCCI), lost about N1.46 trillion in stalled business activities resulting from forex shortages.

This cuts across the private sector operators including fast moving consumer goods, steel, furniture, pharmaceuticals and manufacturing.

According to National Bureau of Statistics (NBS), Nigeria’s real Gross Domestic Product (GDP) fell to 2.84 per cent in the third quarter of 2015, compared to 6.23 per cent in the same period in 2014. In fact, sectors like manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015.

The Manufacturers Association of Nigeria (MAN), noted that the movement in manufacturing activities followed dismal performance of Nigeria’s macro-economy in 2014, which was ascribed to crude oil price crash during the period.

The association identified high cost of credit, poor power supply, high cost of alternative energy and non-availability of local input material as major challenges to the growth of the sector.

It stated: “The average cost of borrowing charged to manufacturers during the period was high and at double digit, which is discouraging to further investment or re-tooling in the manufacturing activities.

“Local raw materials content of manufacturing in the second half fell below the performance in the first half of the year. The scenario obviously highlights the non-diversification and the mono-product nature of the Nigerian economy, which needs to be urgently addressed. It also underscored the negligence in developing the non-oil sector and the non-optimisation of the potentials of the abundant petroleum oil resources in the country.”