Manufacturers flay CBN’s forex policy


Manufacturers Association of Nigeria (MAN) has cried out that its members are still buying foreign exchange from the black market despite the Central Bank of Nigeria (CBN) selling $1.1billion to 4,328 firms in November under its foreign exchange allocation guideline. MAN president, Dr. Frank Jacobs, who disclosed this during his yearly media luncheon last week, decried the non-implementation of the 60 per cent allocation directive given by the apex bank to commercial banks.

He said there are concerns over the non-implementation of the CBN’s directive that banks should sell 60 per cent of their forex to manufacturers, noting that manufacturers have yet to get access to the much needed foreign exchange to boost their operations.

According to Jacobs, most manufacturers still depend hugely on the black market to source forex in carrying out their daily production activities which he said has made many of them close shops or reduce their capacity utilisation.

He said the commercial banks have refused to implement this policy because they complain that the apex bank has yet to make forex available in the country, stressing that the commercial banks themselves source forex from alternative means.

However, the CBN disclosed 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 ($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).

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 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 business environment. He said the government needs to improve the business environment for manufacturers to compete effectively in 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.

Last year was recorded as one of the worst for the manufacturing sector in Nigeria due to the many challenges they had to contend with, most critical of which was the inability of the companies to source foreign exchange to procure raw materials. This led to the closure of some of the companies including Erisco Foods, a tomato paste manufacturer which moved its operation to China.


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