The President of Manufacturers Association of Nigeria MAN, Mr. Frank Jacobs and Director General of the Lagos Chamber of Commerce and Industry LCCI, Mr. Muda Yusuf, at the weekend predicted that many manufacturing companies would face very tough times this year due to the government’s foreign exchange restriction policy.
The MAN President noted that many operators in the nation’s real sector closed shop in 2015 due to harsh operating environment characterised by poor infrastructure, low consumer demand and unfair competition from low quality products smuggled into the country, warning that many more firms would close down due to the foreign exchange policy.
“These companies have invested heavily in plants, equipment and machinery worth several billions of dollars in the country and what the CBN is indirectly telling them is that it is not bothered about the challenges this policy has posed to our members with the attendant loss of jobs”, the MAN boss said
While calling on the Federal Government to have a rethink on the policy by making foreign exchange available for real sector operators that need to import raw materials, he warned that if not reversed, the policy will lead to the closure of more companies.
Yusuf, who also spoke on the development, warned that unless something urgent was done, the policy would portend a great danger for the Nigerian economy, especially in the first quarter of 2016.
According to him, one of the direct implications of the policy is that many firms would be left with only one alternative, which is to embark on a mass sack of their work force in a desperate move to reduce cost in order to remain afloat.
He clarified: “The position of the LCCI is that we want the CBN to lift the ban on foreign exchange now because government needs to do something urgently to convince Nigerians, private sector operators and manufacturers in the New Year. We believe that lifting the restriction on foreign exchange and adjusting the exchange rate of the naira will make substantial impact on the nation’s economic recovery in the New Year.
“We have previously engaged the CBN and other authorities through several media including dialogue sessions and memoranda as part of efforts to draw attention to the implications of its restrictive poreign exchange policy, not only on the business community but also on the nation’s economy as a whole”, Yusuf added.
He said that the Chamber and indeed all real sector operators and the entire business community were very concerned about the current state of the economy and the consequences of the foreign exchange policy thrust in the past few months.
It would be recalled that the Central Bank of Nigeria, CBN, had last year as part of measures to stem the sharp decline in the value of the naira against other foreign currencies excluded some 41 items of imports, including some raw materials, from sourcing foreign exchange from the official market windows.
Source: National Mirror Nigeria