Manufacturers Association of Nigeria (MAN) has cries out that 50 per cent of factories in the country may have to shut down over lack of foreign exchange.
The group noted that if the manufacturing industry is to survive a total collapse, government needs to allocate at least $1.5 billion forex in the next one month, failure of which the sector will suffer 50 per cent shut down.
Though MAN said it acknowledged the $300 million released in October 2016 by the Central Bank of Nigeria (CBN) to assist its members clear a backlog of forex from the initial $1.5 billion requested by the operators in the manufacturing, agriculture and aviation sectors, it is asking for special attention.
But officials of the apex bank said given the pressure from various groups, it is impossible devoting up to that amount to a sector when CBN had earlier settled about $270.6 million matured external loans recorded against some industries.
The official said commercial banks have been instructed to issue a new 12-month tenor instrument, capable of rescheduling about $1.2 billion loan instrument recorded against the real sector and which were due to mature in October 2016.
“These measures were undertaken as part of palliatives to relieve the manufacturing and agricultural sectors of the recession pressure, meaning that fresh demands will be uphill.
“In order to further engender market confidence, ensure access to forex by end users, the CBN has resolved to intervene in the inter-bank foreign exchange market through forward settlement.
“This is an important one-off exercise dedicated to the clearance of the backlog of matured forex obligations for all sectors, especially for procurement of raw materials and machineries for manufacturing companies, including agricultural chemicals,” the official stated.
However, justifying the $1.2 billion request, MAN President, Dr, Frank Jacobs, said if allocated the sector would stabilize the economic from its downward slide.
“No country services recession without a robust real sector, especially for a developing country that depends largely on importation of raw materials. But Nigeria’s case is changing as there is now inward look for most of the raw materials needed by the industries,” he said.
By Emma Eke….
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