The recent directive from the Central Bank of Nigeria (CBN) to remove restrictions on access to 43 items for imports has raised concerns among manufacturers in Nigeria. Mr. Lekan Adewoye, the Vice Chairman of the Basic Metal Sector of the Manufacturers Association of Nigeria (MAN), expressed his apprehensions during an interview on TVC Business, shedding light on the manufacturing industry’s fragile state.
Mr. Adewoye voiced his worries, saying, “For items that can be produced in Nigeria, such manufacturers ought to be encouraged. This directive will further jeopardize the already struggling manufacturing industry.”
He further explained that this move could have negative consequences for those who had invested in backward integration. He noted, “Some of our members who have outrightly invested in backward integration will now start to regret this move, because everyone who can access forex will claim to be an importer, forcing sincere manufacturers to close shop and increasing the numbers of jobless persons.”
While acknowledging that there might be a few items on the list that are of national importance, Mr. Adewoye stressed that not all 43 items should be allowed to flood into the country. He raised concerns about the fate of those who had made investments based on previous policies.
“We, as manufacturers, want the government to take necessary steps because many manufacturing companies will shut down, leading to job losses,” he emphasized. Mr. Adewoye also highlighted that Nigerian manufacturers lack the competitive advantage to compete with counterparts in West Africa and other parts of the world.
“We know that imported products are relatively cheaper because Nigerian manufacturers do not have a competitive advantage over those in developed countries. Even in West Africa, we lack any competitive advantage; at best, we have competitive parity. The few incentives provided by the government have also been removed,” he added.
In a significant move, the CBN recently lifted the ban on access to Forex for imports of 43 items that had been imposed during the tenure of the former CBN Governor, Godwin Emefiele. The CBN’s rationale for this policy change is to boost liquidity in the Nigerian Foreign Exchange market. The central bank has also stated its intention to intervene when there is a shortage of forex in the market. This directive has ignited discussions and concerns within the manufacturing sector about its potential impact on the industry’s future.