Manufacturers renew complaints over forex crises
Seek alternative ways of accessibility
Piqued by inability to import raw materials due to paucity and high cost of foreign exchange (forex), industrialists have appealed to the Federal Government to create alternative measures to enable genuine manufacturers access forex for enhanced production.
The Managing Director of Vitafoam Nigeria Plc, Taiwo Adeniyi, lamented that under the new regime, forex supply to manufacturers is now classified under futures placement requirement, which takes 90 days before forex it could be accessed.
According to him, the first half of the year was very challenging for the manufacturers due to scarcity and high cost of forex to source raw materials.
“The first half of the year was not too good for manufacturing sector. There was a lot of policy changing that took place but it is too early to think that it has not added any impact on the business yet.
“The first day it happened on June 20th, we have a release of so much dollar into the system and everybody thought it was going to continue that way but as I speak to you now we are having to do what is called future placement for request for dollar.
“Its tenured 30, 90 days for us to have access to dollar. And I asked a simple question to the Bank, if you are telling me that the next time I am going to get dollar to buy my material is in 90 days’ time what happened before the 90 days, I should fold my hands and then wait and the thing about it is that we are not even sure it will happened.
“We have been bidding for N282 to a dollar, we bided as at yesterday, we requested for some dollar, we bidden at N285, we didn’t get it and what we hear is that our bid was not successful. So it is still not clear. When should manufacturers go to get dollar to buy material and this is the question we have being asking government,” he added.
Adeniyi expressed the need for government to create a department with the responsibility of paying courtesy visit to the various manufacturing industries in Nigeria in order to understand their plight better.
“Manufacturers will always belong to the Manufactures Association of Nigeria (MAN) and there are several others organs of government that they can use to be able to know, you can imagine that Vitafoam has been around for 52 years. A committee can be set up to visit the companies and confirm.
“They have asked us, and we have filled document for raw materials research council to confirm that this is the materials use after all government issues licenses for us to import. If we are not producers, how would we have access licenses to import. So they know who the manufacturers are, they cannot claim that they don’t know.
On whether there still hope for investors that invested in the manufacturing sector, Adeniyi said: “Well, if you look at share price of Vitafoam as at yesterday (last week Wednesday) it closed at N3.86 per share.
“Before now, it has been hovering around N4 to N5, but it has gone down for reasons of what is currently happening but you can be sure that for us, our plan is to still continue make our stakeholders happy at the end of the day.
“We may not be able to pay as much as we use to pay but again this is a national picture but we would still make sure that we keep our shareholders and stakeholders happy at the end of the day.”
He however assured that despite the challenges, the company would continue to put the shareholder value on the front burner, noting that efforts are geared towards enhancing their value on investment.
The Managing Director of DN Meyer Plc, Kayode Okuwa, during the company’s yearly general meeting, explained that government should assist manufacturers by establishing companies that would serve as intermediaries for manufacturers in accessing foreign exchange.
“85 per cent of ingredients we use in manufacturing is imported while only 15 per cent is sourced locally. Government needed to assist us by having companies that would serve as intermediaries. This sector suppose to drive the nation’s economy,” he said.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.