Tinubu’s reforms squeezing out local manufacturers – MAN
The Chairman of Ogun State Manufacturers Association of Nigeria, MAN, Mr. George Onafowokan, has said that 16 major manufacturing firms have incurred cumulative losses of N792 billion between 2023 and 2024.
Onafowokan said that the manufacturing sector has been facing unprecedented crisis since President Bola Tinubu’s administration decision to float the naira and raise electricity tariff.
The MAN chairman stated this in his address at the 39th Annual General Meeting of the states chapter of the association.
The address was titled: ‘Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability’.
Onafowokan who doubles as Managing Director of Coleman Wires and Cables Industries Limited said many industries unable to cope with the rising production costs have closed.
“The fall of the national currency has been partially responsible for high inflation rate in the country. As of December 2023, inflation rose to 28.92 percent according to the National Bureau of Statistics.
“The Federal Government had also through the Nigerian National Petroleum Company Limited got a $2.25 billion oil-for-cash loan facility from the African Export-Import Bank to boost dollar liquidity in the economy.
“The manufacturing sector incurred significant forex losses in 2023, which extended into 2024, forcing many manufacturers to either temporarily suspend or completely halt their operations.
“In fact, approximately 16 major manufacturing companies lost a combined total of N792 billion due to the depreciation of the Naira resulting from monetary policy reforms. The impact on SMEs and smaller manufacturers has been equally devastating,” he added.
The Ogun State MAN Chairman said the soaring exchange rate was a key driver of the challenges facing manufacturers.
“This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports.
“Due to the limited availability of forex at official rates, many manufacturers have turned to the parallel market, where rates have skyrocketed, causing a significant rise in production costs.
“This increase has placed substantial financial strain on businesses that rely heavily on imported raw materials and machinery.”
He lamented that poor road networks and electricity tariff hikes “have further strained manufacturers’ operational budgets, squeezing already narrow profit margins.”
