Many companies may shut down in January 2021, MAN warns

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The Manufacturers Association of Nigeria has warned that unless the Federal Government prioritised making foreign exchange available to the manufacturing sector, many of them might shut down in January 2021.

The President of MAN, Mansur Ahmed stated this during the annual seminar organised by the Commerce and Industry Correspondents Association of Nigeria in Lagos on Saturday.

The theme of the worksho was ‘Effects of COVID-19 on the real Sector/ SMEs Financing.’

Ahmed who was represented by the acting Director-General, MAN, Mr Ambrose Oruche, noted that the manufacturing sector had been in ‘near death’ situation before the COVID-19 pandemic set in.

He said currently manufacturers were finding it difficult to access forex to import their raw materials and machineries, and this could lead to dire consequences in the new year if not quickly addressed by the Federal Government.

He cited an example of one of the manufacturing companies which had placed an order for raw materials since March and only got the supply in November 2020.

He said,. “Before December 2019, when Coronavirus hit Wuhan in China, the manufacturing sector in Nigeria was in ‘near death’ situation. The sector was neglected by the government.

It is a sector that creates jobs, and contributes between 8 to 9.5 per cent to the Gross Domestic Product.

“The Nigerian economy already had underlining ailments and being affected by COVID-19 only worsened it. So many suppliers abroad refused to sell raw materials to the manufacturers.

“It has not been easy for the manufacturing sector. They create their own water, build roads to their factories and if possible they would build their ports.

“It will be difficult for so many companies to come back after Xmas, because no forex, and they need replacement of spare parts etc.

“I want to appeal to the Central Bank of Nigeria to prioritise forex to the manufacturing sector, to be able to bring in needed raw materials and machineries.

“And efforts should be geared towards the production of raw materials locally.”

Ahmed called for improvement in infrastructural development as in other climes “it takes between 24 to 48 hours to clear consignments at the ports.”

On its part, the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture also advised the government against implementing policies that negatively impacts the productivity and survival of the private sector.

 The Director-General, NACCIMA, Ambassador Ayoola Olukanni, gave the advice in his presentation at the seminar.

The NACCIMA DG spoke against the backdrop of the high rate of inflation, unemployment and increased foreign indebtedness triggered by the COVID-19 pandemics.

He said, “As has been stated on multiple occasions, the official position of NACCIMA is that government must resist the urge to implement policies that negatively impact the productive and consumption capacity of the private sector; the stimulus packages enunciated in the Economic Sustainability Plan must be promptly and efficiently disbursed for the desired impact in various sectors of the economy.

 “Policies must be implemented to improve ease of doing business and reducing the cost of doing business, especially for SMEs that make about 48 per cent to our national Gross Domestic Product and provide about 84 per cent employment according to various studies.

“Implicitly, our SMEs that are the private sector operators are the bedrock of our economy and we must do all we can to support them, not just to survive but flourish as we consider strategic options out of recession hopefully by first quarter of 2021.”

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