MAN Group Complains 30% Increase In Production Cost
Members of the Non- Metallic and Mineral Products, a sectoral group within the Manufacturers Association of Nigeria (MAN) have said that the inability of the Central Bank of Nigeria (CBN) to assist them with foreign exchange has crippled their factories and triggered 30 per cent increase in the cost of production.
The association noted that the challenges in accessing foreign exchange has made it difficult to procure raw materials for productions and spare parts for their factories.
What makes it worse is that many of the manufacturers have loans that are running but could not be put into productive use.
The CBN in measures to address the forex crisis in July banned forex sale to the Bureau De Change (BDCs) operators and sell weekly to the commercial banks which in turn are mandated to sell directly to the public.
Godwin Emefiele at the end of the Monetary Polucy Committee (MPC) meeting in July announced the ban,
saying the parallel market has become a conduit for illicit forex flows and graft.
“We are concerned that BDCs have allowed themselves to be used for graft,” stated Emefiele who also accused nternational bodies, including some embassies and donor agencies, of being complicit in illegal forex transactions that have hindered the flow of foreign exchange into the country.
However, National Chairman of the Group, Afam Mallinson Ukatu said in Lagos that several manufacturers were still not able to access forex, leading to factory collapse, especially in the steel sector of the economy.
Ukatu said that MAN had been advocating that the CBN should create a dedicated window that could help genuine manufacturers access forex with ease.
He said: “The manufacturing and steel industry is facing lots of problems, regarding accessibility to foreign exchange to buy raw materials and spare parts. These two important things are what keep manufacturing going or manufacturing working. If you are not able to have access to forex, in order to buy those items, you are collapsing the factories.
“CBN hasn’t done much in this area. MAN has been advocating that the CBN create a window that can help genuine manufacturers access forex with ease but to no avail.
“We are appealing to the government to make an investment friendly monetary policy to prevent the total collapse of industries.”
He pointed out that many manufacturers, who collected loans, were becoming hypertensive over non-access to forex at the moment to stabilise their businesses and loan repayments.
Ukatu stressed: “If you have a loan running with the commercial banks, and Bank of Industry (BoI) for example, there is no way you will allow your factory to shut down, because you must service the loan facility, so you have to find a way to get your spare parts and raw materials.
“But when you are not getting forex from CBN windows, definitely, you have increased your cost of production by 25 per cent to 30 per cent. So, if it is a business that has a small margin, all your projections you have done for the year would be gone.
“We are still pleading and asking government to do something to help finance raw materials and spare parts.
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