Expert seeks creation of special FX window for manufacturing sector
For the manufacturing sector to record meaningful growth that would impact positively on the economy in 2023, a stakeholder in the sector has identified the need for the government to create a special window that would help improve the sector’s access to foreign exchange.
An industrialist and Group Managing Director of Vitafoam Plc, Taiwo Adeniyi, while reviewing the company’s 2022 performance and charting way forward for the manufacturing sector this year, identified forex shortages as one of the major factors impeding the growth of the manufacturing sector in Nigeria, adding that if government can establish a special window that would make forex accessible to genuine manufacturers, it would go a long way to boost the sector’s contribution to nation’s GDP.
Adeniyi pointed out that the prevailing forex shortages have continued to impact negatively on the cost of operations of listed firms thereby depressing the bottomline of companies under the sector.
He stressed the need for the government to urgently address the plight of manufacturers, especially in the areas of forex instability to create more jobs and boost expansion.
Adeniyi said: “Top on the list of what we are asking the government to attend to is the dichotomy between the various forex windows that we have, expecting them to bring in economics to be able to look into the impact of the various decisions as regards forex on the economy.
“BOI gives loans to manufacturers, they will make a list of their forex requirements to the CBN and the apex bank will grant it to genuine manufacturers because they know them. Government should create a special window where genuine manufacturers can access forex. You know them; you can appraise them, we pay taxes.
“Government has everything they can use to measure performance, they have done all manners of disapproval and delisting, yet it is not working. Those items on the exclusive window get to this environment even cheaper than those of us because the windows we get forex make a mess of it.”
Although he admitted that local sourcing of raw materials remains one of the solutions to forex unavailability, adding that in the absence of local production capacity, importation of the foreign raw materials became inevitable.
Aside from the issue of forex, Adeniji pointed out that insecurity, high energy cost and parlous infrastructure are other disincentives to investment in Nigeria.
“If you do a combination of these factors, you will find out that if you cast your mind back at what has helped the nation to be where it is currently, these elements form the major part.”
He stressed the need for the government to encourage private sector involvement in infrastructure by initiating favourable policies that would help to create more jobs and close the infrastructure gaps.
On how the company has managed its operational cost and increased its profitability over the years, he said: “Research, development and innovativeness. We have been able to save cost through innovations, not doing the same thing over the period. This has helped us to stay ahead of trends in the industry and become more competitive. It has also translated to savings for us.”
He assured shareholders that the company would continue to do everything within its powers to improve its performance in a sustainable manner, enhance profitability and remain consistent with dividend payment.