FX Crisis: How Manufacturers Lost N1.5tn In Six Months, Says MAN

The Manufacturers Association of Nigeria (MAN) has disclosed that its members have experienced losses amounting to at least N1.5tn over the past six months due to a forex-related Crisis (FX Crisis).

This revelation, coming amidst assertions by the Central Bank of Nigeria (CBN) that all valid forex requests had been settled, underscores the ongoing challenges faced by manufacturers in the country’s economic landscape.

In an exclusive interview, MAN’s Director-General, Segun Ajayi-Kadir, shed light on the adverse impact of the forex crisis on manufacturers.

He highlighted that despite the CBN’s claims of clearing all valid forex backlogs, many manufacturers still await the settlement of their dollar requests, some of which have remained pending for an extended period.

Contrary to the CBN’s announcement of successfully clearing $7bn worth of forex obligations, the President of MAN, Francis Meshioye, emphasized that the forex requests of its members remain unresolved, posing detrimental effects on numerous businesses.

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Meshioye expressed concern over the lingering status of these requests, emphasizing the negative repercussions on manufacturers’ credibility and operational capabilities. He cited challenges such as the inability to import raw materials, defaulting in settling outstanding dollar debts, and the resultant impact on production and supply chain operations.

Efforts to address the issue through stakeholder meetings, including one convened by the Minister of Industry, Trade, and Investment, have yielded limited success. Despite assurances from the CBN and consultations with relevant bodies, manufacturers continue to grapple with the adverse effects of the forex crisis.

Ajayi-Kadir highlighted that the N1.5tn losses incurred by manufacturers stemmed from various factors, including interest payments on unremitted dollar debts, excess payments on import duty assessment, and the rapid depreciation of the local currency.

He stressed the urgent need for a resolution, warning of the potential closure of more factories if the situation persists.

While acknowledging the possibility of resorting to legal action, Ajayi-Kadir emphasized the complexities and potentially prolonged timelines associated with such measures, urging stakeholders to prioritize a swift and effective resolution to safeguard the national economy.

In conclusion, MAN’s revelation underscores the profound challenges faced by manufacturers amidst the ongoing forex crisis. As the sector grapples with substantial losses and operational constraints, urgent and decisive action is imperative to mitigate further economic repercussions and foster sustainable growth and development.