Local manufacturers say CBN policy ramping up capacity

Nigerian manufacturers say the Central Bank of Nigeria (CBN)’s foreign exchange (forex) policy is a game changer and is ramping up their production capacities.

According to them, Africa’s largest economy will have a strong and diversified manufacturing sector like the Asian Tigers if this policy is allowed to continue.

The manufacturers acknowledged that the CBN policy on forex has, since its inception, more than doubled their productive capacities, with attendant benefits in terms of expansion to meet increasingly higher demands for their products and services.

The manufacturers asked the CBN and Federal Government to mitigate challenges facing local manufacturers’ capacity to expand, such as high interest rate and smuggling, to prevent a Greece experience in Nigeria.

Nassos Sidirofagis, deputy managing director, Tempo Paper Pulp & Packaging Ltd, said since the CBN foreign exchange policy came into existence, Tempo has been able to increase its production capacity from 50 percent to 70 percent. This, he said, has impacted their expansion positively as they raise export volumes to repatriate foreign exchange into the economy.

Sidirofagis said the policy has helped the manufacturers to realise the urgent need to expand because of increasing demands for their products, adding that his company is mulling an expansion project due to increasing demands between 2016 and 2017.

“We can now smile a little bit,” he said. “We have since developed capacity to also attract foreign investors, who we believe are exploring investment opportunities in our organisation. Therefore on all sides this is a win-win situation for Nigeria and local manufacturers,” he said.

On mitigating challenges facing local manufacturers’ capacity to expand, he noted that government should focus more on the manufacturing sector so that Nigeria will not have the Greece experience. He advised that the policy must be in place for a minimum of two years, to facilitate full development of local capacity to attract investors.

Oluwasesan Taiwo-Tijani, group operation manager, SREN Chemicals Limited, said his organisation has enormously benefitted from the CBN foreign exchange policy.
Taiwo-Tijani explained that the CBN forex policy has forced several companies who are import-driven to patronise SREN Chemicals, stressing that this has raised the company’s sales and productive capacity has increased by 30 per cent.

He appealed to the Federal Government to retain the policy with a view to sustaining local content development and to turn Nigeria into an export dependent country.