Manufacturers demand better forex market, infrastructure –

Forex ban on BDCs: Our fate hanging in the balance –MAN

By Merit Ibe, [email protected]

 

Operators in Nigeria’s  real sector have expressed confidence in the Federal Government ability to facilitate growth and success of the sector and the economy at large in 2022 through adequate Foreign Exchange  policy management, infrastructure investment in the areas of power, road and improvement of security situation across the business value chain in the country.

Chairman, Non-Metalic Mining, Manufacturers Association of Nigeria (MAN), Mallinson Ukatu, who voiced the view of the manufacturers at an agenda setting forum in Lagos, recently noted that manufacturers  were producing under excruciating environment following the inability to access forex to purchase needed raw materials and spare parts, inadequate power supply which has increased demand for gas as alternative source of power generation.

Ukatu who is also the managing director of NISPO company said MAN has been advocating that the CBN should create  a window that can help genuine manufacturers access forex with ease.

He expects government to make an investment  friendly monetary policy  to prevent total collapse of industries, basically because of the high exchange rate.

He called for unification of gas prices in terms of paying in local currency  or  pegging it at a fixed rate because it is meant to be for manufacturers.

The manufacrturer expressed concern over the increase in the price of gas, regretting that this was coming when the global economy was faced with a huge challenge.

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The MAN boss, who decried that gas which is gotten from our soil is being sold in dollars, pleaded  with government to reverse the trend so that they can pay in naira.

“We have been complaining that we are being charged in dollars for consuming gas locally and nothing has been done to reverse the ugly trend. I have been complaining about this over the years at the parent organisation (MAN) for a long time that the trend should be reversed and also for the government to look into it.

“We are being charged according to the exchange rates. Now that the exchange rate has gone up, following the technical devaluation of the Naira, and scarcity of Forex, it has increased.”

“A lot has to be put into production apart from gas. Infrastructure, poor road network,  poor ports facilities need to be addressed. A road of about 20 kilometres cannot be fixed in four-years, it’s a joke.”

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He urged the government to partner the private sector so that these roads can be constructed for  better business environment.

“We were also looking at the government to give us some relief for one year or more, to enable us pay salaries, gas bills and offset some bills that accumulated during the lockdown but what we are getting is increased gas price.”

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This is not done in any part of the world, it is only in Nigeria that this is happening and it is quite unfortunate.

Against the backdrop of the challenges faced by investors in the foreign exchange market, the Chief Executive Officer, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf,  proffered  an urgent review of the current foreign exchange policy regime, calling for a flexible exchange rate policy regime. “Our proposition is that we should adopt a flexible exchange rate policy regime.  We would like to clarify that this is not a devaluation proposition. Rather, it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market.  It is a model that is sustainable, predictable and transparent.  It is a policy regime that would reduce uncertainty and inspire the confidence of investors.  It is a policy framework that would minimise discretion and arbitrage in the foreign exchange allocation mechanism. 

Chairman, MAN Apapa branch, Frank Onyebu noted that his expectation for 2022 is unfortunately bleak. “This is predicated on the fact that there appears to be no conscious measures on the part of our government to reinvigorate the economy. All we have seen thus far is borrowing and more borrowings, with little or no direct links to economic development.

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“My advice to government is to declare a state of emergency on the economy. This should be done with wide consultation and active engagement with the private sector. The problems are enormous but surmountable. It is still possible to turn things around with the political will and the right caliber of people.

For the Chairman, Lagos Chamber of Commerce and Industry (LCCI) SMEs Group, Daniel Dickson -Okezie, he is not expecting much improvement in the early quarters of the year.

“We don’t expect much improvement early in the year. But I believe  the more the administration is nearer to exit,  people lose confidence in the system. Maybe towards the end of the year there might be improvement.”

“We expect forex will improve for manufacturers, special window to be created for them.

“Attitude is important here. When people believe that things will go well it affects them positively. Builds their confidence towards investment. Power, forex, policies should be improved.”

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