Due to the current devaluation of the country’s currency, the naira, the Manufacturers Association of Nigeria, MAN has stated that its members lost over N500 billion to forex differentials within the last five months.
The Chairman of Apapa branch of Manufacturers Association of Nigeria, Mr Babatunde Odunayo, who stated this during the Association’s 45th Annual General Meeting (AGM), in Lagos on Thursday, with the theme; “Economic Recession and the Future of Manufacturing in Nigeria,” noted that Letters of Credit (LC) and the approved Form Ms were documented at CBN’s intervention rate of N197 per US Dollar, but affected manufacturers as they are expected to redeem them at the flexible exchange rate of $320 per Dollar.
He noted; “Manufacturers currently face up to N500 billion in exchange difference between the approved Form M/LC established rates and the flexible market rates of $320/$1. This is a huge lost that manufacturers are to bear whereas the related goods have been sold before the commencement of the new exchange rate discovery system.”
He said that the huge lost which occurred through the introduction of the new rates has resulted in many of its members closing shops, loss of investment and loss of employment in the sector, adding that the exchange losses would result in requiring additional working capital to shore up cash difference between N320 and N197 in order to be able to buy the required forex volume at the flexible exchange rate market.
In his speech, Dr Jacobs Udemba, President, MAN, who was represented by the National Vice President of MAN, Rev. Isaac Ade Agoye urged the Federal Government to harmonise the role of various government regulatory agencies in order to eliminate conflict of roles amongst them, and multiple charges to manufacturers.
He said, there is the need for the government to develop the infrastructure base of the economy by actively involving the private sector through Public Private Partnership (PPP), stressing that improving energy supply and reviewing the privatisation exercise as the current owners do not have the capacity to deliver effectively.
Udemba advised the government to focus on implementing necessary policies and strategies aimed at unleashing the full potentials of the Nigerian manufacturing sector and rely on the ideas and inputs of manufacturers at all stages of formulation and implementation of new industrial policies.
He said; “Implement strategic plans aimed at boosting manufacturing activities, based on the Nigerian Industrial Revolution Plan (NIRP) and the National Enterprises Development Programme (NEDEP). Change course of SMEs by facilitating market access and integrating Nigerian manufacturers and service providers into regional and global value chains.
“Ensure that MAN plays critical roles in the implementation of government economic agenda with manufacturing and private sector in general, driving the process. Design strategies to achieve diversification and growth that is pro-competition, wealth creation and regulated for private and public sector interests, insulated from external and domestic shocks.”