Forex: Manufacturers plead for time to backward integrate as losses exceed N1.46trn

In the wake of foreign exchange restrictions that have prevented manufacturers from importing raw materials, investors are asking the Central Bank of Nigeria (CBN) to give them some more time to backward integrate, as Nigeria still has no production capacity in some of the banned items.

The CBN had banned importers of some items from accessing the local foreign exchange market following the negative impact of crashing crude oil prices on the economy.

Like other manufacturers, real sector players in Kaduna say this has dire consequences on the struggling manufacturing sector, asking the Federal Government to have a re-think on the policy. They say it has caused the loss of N1.46 trillion to the Organised Private Sector (OPS) between July and December 2015, while the losses keep mounting.

“Our view is that such items can be included only after allowing investors ample time to backward integrate so as to generate these items locally,” said Abdul-Alimi Bello, president, Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA), at the ongoing international trade fair in Kaduna.

“To avoid the risk of industrial closures, we plead that the policy be reversed,” Bello said.

According to Bello, the patronage of made-in-Nigeria products by public and private sector operators should be vigorously encouraged, as only the implementation of the Procurement Act will make this a reality.

While backward integration involves a company buying its suppliers, the Procurement Act ensures that government ministries, departments and agencies (MDAs) patronise locally made products.

The Kaduna Chamber’s president said the present administration came into power at a period of economic crises, pointing out that oil crisis was a global phenomenon and the country needed international support and partnership.

“Above all, government needs to develop other sectors of the economy like manufacturing, agriculture, solid minerals and service sectors to strengthen the current economic cord. The way to do this is to create an enabling environment in terms of the right infrastructure, affordable long-term financing and the right policy,” he said, adding that once the environment was convivial Nigerians would make things happen.

Aisha Abubakar, minister of state for industry, trade and investment, who represented Okechukwu Enalamah, the ministry’s minister, said government was committed to stabilising the naira against other currencies, stressing that what the CBN had done was to unveil short-term measures to stabilise the naira.

“The task of transforming Nigeria into an industrial giant cannot be achieved without the needed collaboration with the private sector. For a country to attain sustainable growth and development, the economy has to be diversified in order to ensure job creation and increased investment inflow into key areas like mining, agriculture, manufacturing for enhanced and rapid industrialisation,” Abubakar said.

Bassey Edem, president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said Nigeria must look to other sources of revenue in the face of oil crash.