Nigerian Manufacturers still depend on black market for forex, says MAN

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By Femi Adekoya

Despite the Central Bank of Nigeria (CBN) selling $1.1billion to 4,328 firms in November under its foreign exchange allocation guideline, manufacturers have decried non-implementation of the 60 per cent allocation directive given by the apex bank to commercial banks.

According to the Manufacturers Association of Nigeria (MAN), there are concerns over the non-implementation of the apex bank’s directive as manufacturers are yet to get access to the much needed foreign exchange to boost their operations.

MAN President, Dr. Frank Jacobs, said most of its members still depend hugely on the black market to source for forex in carrying out their daily production activities which he said has made many of its members close shops or have reduced their capacity utilisation.

According to the MAN president, the commercial banks have refused to implement this policy since the apex bank is yet to make forex available in the country, stressing that the commercial banks have refused to implement the policy since they source for forex from alternative means.

However, the apex bank revealed in its latest report on foreign exchange utilisation for the month of November 2016 on its website that 20 firms received the largest share of $322.79 million, led by Crown Flour Mills which got $52.5 million through Access Bank and Coronation Merchant Bank for importation of Russian wheat.

Apart from oil marketing firms, other companies in the top 20 categories are Watcot Limited ($24 million), C Technology Distribution ($21.2 million), British American Tobacco Limited ($19.85 million) and IHS Towers of Strength ($19.6 million). The rest include: IPI Powertech Nigeria Limited ($17.1 million), Flour Mills of Nigeria Plc ($15.64 million), Dangote Sugar Refinery ($14.79 million), Tiger Branded Consumer Goods Plc ($14.79 million), Edo Cement Company Limited ($10.3 million), Stanbic Nominees ($8.9 million) and De United Foods Plc ($7.83 million).

In his words, Jacobs said: “‎The implementation has been very poor. We had a meeting with the CBN Governor where he said there was a directive to commercial banks to allocate 60 per cent of the forex to manufacturers, but after engaging the commercial banks we were told they source for forex from alternative sources and not from the CBN so the apex bank cannot decide who the commercial banks must make forex available to. Government should make more foreign exchange available if it really wants the 60 per cent allocation of forex to manufacturers to materialise.”

The MAN boss during its yearly media luncheon, however expressed worries over the recent trade liberalisation agreement signed by the federal government, saying that Nigeria is at a disadvantaged position due to its harsh and unfriendly operating environment for business, stating the need to improve the business environment for manufacturers to compete effectively at the global market.

He also called on the federal government to recapitalise the Bank of Industry (BOI), adding that the development finance institution ( DFI) does not have the capacity to meet the nation’s manufacturing sector needs.

He said in consonance ‎with its mandate, the association would pursue some strategic issues on the association’s advocacy radar which includes significant improvement in infrastructure, especially power and transport, campaign for patronage of made-in-Nigeria products among others.

The Guardian

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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