Manufacturers groan as FX crisis worsens
According to the Manufacturers Association of Nigeria, the Central Bank of Nigeria's processes for allocating foreign exchange have put its members in a bind.
According to the association, the manufacturing industry is becoming endangered due to challenges ranging from currency storage to a variety of other issues.
Segun Ajayi-Kadir, the association's Director-General, stated this during an interactive session with journalists in Lagos.
According to him, the government must address the issue of prioritizing the allocation of scarce forex on purpose.
Ajayi-Kadir, who emphasized the importance of forex, stated that the government's misplaced priorities had caused the manufacturing sector to suffer the most in terms of foreign exchange allocation.
"When we do exports and repatriate our profits, it goes through the CBN," he explained. As a result, they are aware of every kobo that enters your account. You can only get your money back at the official rate once they get it.
"The painful thing is that once you are subjected through all these processes and have gotten your money at the official rate including the little encouragement they give if you bring it through the I and E window when you now want to import raw materials or spare parts or machines to produce again.
"You go to the money deposit banks, and the ones that they can give you if you're lucky, are about 5% of what you want. You'd have to go to a Bureau De Change now, and we know what their rates are. As a result, we are being shortchanged, which is why the sector's performance is declining."
According to the MAN DG, the only way for Nigeria to get out of its current currency crisis is to increase domestic production of goods that can be manufactured in the country.
He urged the government to prioritize the productive sector by encouraging domestic production.
"There is no way you will get out of the forex crisis if you do not produce locally, and it is common sense that what you import is what you need dollars for. We won't need dollars to import them if we make them in Nigeria. As a result, we should prioritize the productive sector, which has the potential to revitalize the economy and encourage domestic production.
"Manufacturing is becoming such a vulnerable profession. We have always maintained that manufacturing is not a typical business venture. Every country must make a deliberate decision. "There is no developed country in the world that does not have a vibrant manufacturing industry," he added.
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