FG succumbs to MAN’s pressure, directs 60% FX to end users

The Manufactures Association of Nigeria (MAN) has commended the Federal Government on the Central Bank of Nigeria’s (CBN) recent circular directing all authorised dealers to henceforth dedicate at least 60 percent of their foreign exchange purchases from all sources to manufacturers that make use of imported raw materials for production.

It could be recalled that the Manufacturers Association of Nigeria had been in the forefront of advocating for a special consideration and allocation of foreign exchange to the manufacturing sector.

The President of MAN, Dr Frank Udemba Jacobs in a media chat on Tuesday said the new policy will enable manufacturers and multinationals engaged in export business to repatriate their funds as against the old policy that prevented them from bringing back their export proceeds.

He called on the government to reconsider the policy that banned 41 items from assessing as some of the products banned are raw materials and machineries that are keeping the factories running.

He regretted that over 56 companies have had to close shop as a result of the ill-advised policy. Jacobs also called on government to remove essential raw materials which are not available locally from the list.

He said: “Government should create a special interest rate regime for manufacturers at a single digit of not more than 5 per cent if we truly want to reflate the economy. We will encourage our members not to bid too high as the new policy will help our members to determine the value of the naira henceforth. Government should indeed subsidise interest rate for manufacturers as they are the engine of growth for any economy.
“The new policy will also encourage our members to engage in backward integration, import substitution and the realignment of operations in line with present economic realities.”

Furthermore he  called on government  to recapitalise and properly fund the Bank of Industry (Bol), stressing the need for government to channel the various intervention funds through the bank as they have the capacity  to manage such funds, judging from  their activities with small and medium enterprises and large corporations.

On if manufacturers will not abuse the new policy of granting them 60 per cent forex to them, he responded that no genuine manufacturer will engage in round-tripping when they have need for not only raw material but also machinery to run their businesses.

He also commended  the request to compel government to buy made-in-Nigeria goods as against unbridled importation, noting that if adhered to the manufacturing sector will grow and boost the almost crippled economy and also check job losses.

The President said: “Nigeria must buy made in Nigeria goods to boost the economy and   stimulate the manufacturing sector. I must stress that most of our members are affected as a result of the 41 items and except  they are addressed the folded companies  may not come back. However, the Forex  challenge is not the only problem manufacturers encounter daily  but other issues such as  power, multiple taxation and dearth of  infrastructure needs to be addressed holistically before all the closed companies  can bounce back will come back.”