OPS demands review of foreign exchange policy

The Organised Private Sector (OPS), yesterday demanded that the Central Bank of Nigeria (CBN) must review its policy on the 41 items restricted from the official foreign exchange market.

They said that the policy that led to placing the items on the import prohibition list was hurting the manufacturing sector in such a way that could no longer be ignored by investors in the private sector.

The resolve to push for a review of the policy came at a stakeholders’ dialogue organised by NOIPolls and the Centre for the Study of the Economics of Africa (CSEA) in Abuja.

The forum attracted representatives of the Manufacturers Association of Nigeria (MAN), National Association of Small and Medium Enterprises (NASME) and the Lagos Chamber of Commerce and Industry (LCCI).

The stakeholders argued that the restriction has led to the closure of many companies and the relocation of others from Nigeria to Ghana and other neighbouring countries, as well as the refusal by foreign partners to repatriate over $10 billion held offshore by Nigerian businesses.

They also stated that about 272 manufacturing firms were either ailing or have closed shop over the last couple of months, while thousands of jobs were being cut on a daily basis. The manufacturers also listed high interest rates, poor patronage of locally manufactured products, poor power supply and policy inconsistency as the major challenges confronting the manufacturing sector in Nigeria.

Director, Research and Advocacy, LCCI, Mr. Vincent Nwani, alleged that the CBN announced the 41-item list without consulting the OPS and that the chamber has made several representations to the apex bank without achieving the desired results.

“There must be an urgent review of the CBN’s policy on the restriction of access to foreign exchange placed on 41 items, as about 16 of the total items on the list, serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items,” he said.

According to Nwani, the ban on oil palm has led to the loss of about 100,000 jobs over the last couple of months, with major blue chip companies in Nigeria relocating to neighbouring countries; while the ban on glass and glassware has led to the loss of 80,000 jobs mainly in the pharmaceutical industry, as companies in this sector now find it difficult to package their products.

“Some of the items placed on the restriction list by the CBN should be reinstated 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.

“The manufacturing and industrial sectors lost about N1.4 trillion as a result of foreign issues, while about 780 raw materials needed by the sector were affected by the restrictions placed by the CBN.”

Executive Secretary of NASME, Mr. Eke Ubiji, said that recently about 222 of its members have either collapsed or are ailing. He blamed their woes on lack of access to credit, foreign exchange challenges, high interest rate, multiple taxation and poor infrastructure, among others.

Director, Economics and Statistics of MAN, Mr. Ambrose Oruche, lamented that the unavailability of productive inputs is the major challenge confronting manufacturers in the country.

“Presently, about 50 manufacturers have closed shop, while some have downsized. Some manufacturers are still producing due to their love for this country. Government’s policy on cement should have been adopted in this case,” he said.

He also faulted the decision of the CBN to increase the Monetary Policy Rate (MPR) to 14 per cent, stressing that it has made it difficult for manufacturers to access funds to finance their operations.