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350 Firms shut down  under Buhari regime – Stakeholders

 

By Charles Nwaoguji

 

Since president Mummend Buhari came into power, over 350 companies has shut down operation , most especially when the foreign exchange restriction was  placed on 41 items by the Central Bank .

The stakeholder said that since the restriction order was placed, about 350 firms had been forced out of business, 50 of which were manufacturing companies.

While some of the affected manufacturers have relocated to neighbouring countries, according to Manufacturers Association of Nigeria, at least 222 small-scale businesses have closed shops, leading to 180,000 job losses.

The Director, Economics and Statistics, MAN, Mr. Ambrose Oruche, lamented the unavailability of productive inputs, stating that this was the major challenge confronting manufacturers.

He attributed the problem largely to the ban by the CBN on certain items from acessing the official window of the forex market, adding that the current operating environment was too harsh for many manufacturers to continue to operate.

He wondered why the CBN and the Federal Government kept coming out with what he described as conflicting polices, noting that this was affecting the growth of the manufacturing sector.

He said, “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.

“In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible that today, we are a net exporter of the commodity.”

Oruche said the fact that the economy was technically in recession should have made the CBN to redirect its policies towards stimulating the economy rather than tightening money supply.

He also listed high interest rates, poor power supply, policy inconsistency, poor patronage of locally manufactured products, poor supporting infrastructure, among others, as the challenges confronting manufacturers.

In his remarks, the Director, Research and Advocacy, LCCI, Mr. Vincent Nwani, said this is not healthy for the economy.

He said,  “There must be an urgent  review of  industrial policy to take of the manufacturing sector, especially as the country lacks the capacity for optimal production of the items.”

For instance, he said that the ban on oil palm alone had led to a loss of about 100,000 jobs over the last couple of months, while the ban on glass and glassware resulted in 80,000 job losses mainly in the pharmaceutical industry.

Nwani said many companies in the pharmaceutical sector now found it difficult to package their products.

He said, “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand in the country is put at about 1.8 million metric tonnes.

“Today, Presco Oil has orders of up to December 2017 to fill, it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.

“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.”

Nwani said, currently, about $10bn of manufacturers’ funds were stuck in foreign countries because the owners had no confidence in the economy.

He said, “We have about $10bn stuck in one country or the other earned by our members. Some of them are not manufacturers; some are agriculturists or merchants of different products.”

Meanwhile, the President of MAN, Engr. Mansur Ahmed,  there is the need for government to look into power generation.

“No Nation can industrialized without paying  attention to power distribution and generation, as a nation we must begin to attention to power, if industrial sector must survive, government must act now,” he said.

 

About Editor Charles

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