FG has grounded the economy - Manufacturers Association of Nigeria (MAN)

Claim 272 companies have shut down
 Allege loss of 180,000 jobs over ban on palm oil, glassware
 Say $10bn trapped outside Nigeria

Members of the Organised Private Sector (OPS) in Nigeria on Tues­day appraised the monetary and fiscal policies of the Fed­eral Government and conclud­ed that they were anti-invest­ment and have paralysed the economy.
They said that instead of re­flating the economy, the Presi­dent Muhammadu Buhari ad­ministration was diminishing it through unfriendly economic policies which have forced hun­dreds of companies to close shop or to relocate to Nigeria’s neighbouring countries, caus­ing massive job losses.
They asserted that 272 com­panies have shut down while 180,000 jobs have been lost since President Buhari came into office on May 29, 2015.

 The parlous state of the economy was reviewed in La­gos on Tuesday by the OPS members – the Manufactur­ers Association of Nigeria (MAN), the National Asso­ciation of Small and Medium Enterprises (NASME) and the Lagos Chamber of Commerce and Industries (LCCI).
They spoke at a forum tagged the “Stakeholders Di­alogue on the Manufacturing Sector in Nigeria,” organised by NOIPoll and the Centre for the Study of the Economics of Africa (CSEA).
The OPS operators said that following unhealthy eco­nomic policies in the county, investors had declined to repat­riate and inject funds into the economy to the tune of about $10 billion.
In his presentation, the Di­rector, Research and Advocacy of LCCI, Mr. Vincent Nwani, called for the immediate review of the Central Bank of Nigeria (CBN’s) policy on the restric­tion of access to foreign ex­change placed on 41 items.
The CBN Governor, Mr. Godwin Emefiele, had recent­ly maintained that it had no intention of reviewing the list of the 41 items excluded from foreign exchange access, add­ing that it was yielding the de­sired result.
But Mr. Nwani maintained that the CBN has no option but to review that list, citing that about 16 of the items in the list are critical raw materi­als for intermediate goods pro­duced in Nigeria, which are yet to be optimally manufactured in the country.
He said that the ban on palm oil had led to the loss of about 100,000 jobs over the last couple of months, with major blue chip companies in Nige­ria moving to the neighbour­ing countries; while the ban on glass and glassware had led to the loss of 80,000 jobs in the pharmaceutical industry, as companies in the sub-sec­tor find it difficult to package their products.
According to him, “Local production of oil palm is put at about 600 metric tonnes an­nually, but the total demand of the country is put at about 1.8 million metric tonnes. Today, Presco Oil has orders of up to December 2017 to fill because it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a short­fall of about 1.2 million met­ric tonnes.
“Some of the items placed on the restriction list by the CBN should be restated until the country develops the ca­pacity to produce them locally. Some of the items need a peri­od of between three and seven years for the country to devel­op self-sufficiency in their pro­duction.
“For instance, it takes a minimum of five years for oil palm to be planted and harvest­ed. The CBN should have given us more time. The manufactur­ing and industrial sectors lost about N1.4 trillion as a result of foreign exchange issues, while about 780 raw materials need­ed by the sector were affected by the restrictions placed by the CBN,” he said.
The Director of Econom­ics and Statistics in MAN, Mr. Ambrose Oruche, decried the high interest rate and poor access to foreign exchange, which, according to them, has hindered growth in the indus­try.
Oruche said that the deci­sion by the Federal Govern­ment to increase the interest rate to 14 percent was not well-thought out.
He said the government ought to have increased growth in the economy and not con­tract it, stressing that that there have been inconsistencies in government’s policies.
Like Nwani, Oruche said that the government’s exclu­sion of 41 items was not done in the interest of the manufac­turing industries.
He said: “Since the crash in crude oil prices in 2014, man­ufacturing has been almost impossible in the country. The major challenge is that of main­taining sizeable capacity utilisa­tion due to the unavailability of raw materials.
“Sadly, some policies imple­mented to curb the fall of the Naira were inimical to manu­facturing industries and MAN ought to have been consulted before the ban of the 41 items.
“And the increase in MPR to 14 percent has made it dif­ficult for manufacturers to get funds to do businesses,’’ he la­mented.
Similarly, a consultant with NOIPolls, Dr. Olamide Taiwo, said that studies by the outfit showed that only five percent of manufacturers were in good shape.
He said there is a high de­pendence on imports and ex­ports remain low and these affect the growth of the man­ufacturing industry.
Taiwo further said that only local demands drive profitabil­ity in business and that poor power supply and policy in­consistency were challenges of the industry.
He therefore urged the gov­ernment to implement import substitution programmes and ensure a strategic foreign ex­change window for manufac­turers.
At a separate forum in Abu­ja, the President, Association of Bureau De Change Opera­tors of Nigeria (ABCON), Al­haji Aminu Gwadabe, lament­ed that banks were hesitant in selling foreign exchange to its members. He said that at pre­sent, only about nine percent of BDCs had access to foreign ex­change sales by banks.
He claimed that BDCs with access to Forex were only those located in Lagos – while others had no access, adding that the situation was compounded by the stringent conditions being given by banks to his members.