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50,000 Abuja Workers Sacked in Two Months

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Worker

The scarcity of foreign exchange for importation of raw materials by local industries is adversely affecting the sector as over 50,000 workers have lost their jobs in Abuja in the last two months.

The President, Abuja Chamber of Commerce and Industry, Mr. Tony Ejinkeonye, confirmed the job losses in an exclusive interview with our correspondent in Abuja.

Similarly, the President, Manufacturers Association of Nigeria, Mr. Frank Jacobs, said that about 10 companies had formally notified the association about their intention to shut down operations before the end of this month.

Ejinkeonye said that except something urgent was done by the Federal Government to address the forex exchange problem, more people could lose their jobs.

“Currently, in Abuja, we have about 50,000 workers that have lost their jobs in the last two months. I must confess this is not a good time for the manufacturing sector,” he said.

He said majority of manufacturers operating in Abuja could no longer access foreign exchange to import raw materials, adding that those who managed to get forex from the black market could not sell their products as consumers could not pay the high prices.

He said, “As manufacturers and industrialists, the scarcity of foreign exchange has affected us in the area of raw materials that need to be imported. We cannot access foreign exchange anymore to import raw materials.

“Also, maintenance of some of these facilities has become a problem because the spare parts have to be imported and the inability to get foreign exchange to import them has impacted negatively on our operations.

“Some of our members who are manufacturers have even gone to the extreme of withdrawing their goods from the market and need to increase their prices to reflect the high foreign exchange rate. Many of us are having the problem of retaining our workers because the production is being hampered by lack of raw materials.”

The ACCI president said the situation had become so bad that even big manufacturing companies such as Unilever Nigeria Plc, Dangote Cement, Air France and Emirate Airlines were having problem getting foreign exchange.

He stressed the need for the Federal Government to come up with a comprehensive approach that would address the problem.

He said, “There is a need for government to do something urgently and stop living in denial. The Central Bank of Nigeria and the Ministry of Finance should come out and say something that would move us out of this forex crisis.

“Things are really bad. As I’m talking to you now, Unilever, Dangote Cement and our other members are crying. A lot of companies have also threatened to lay off workers. If something urgent is not done within the next 30 days by the government to address this, you will see companies like Dangote and Unilever Nigeria sacking some of their workers.”

Ejinkeonye added, “Airlines like Air France and Emirates are really having very serious problems now in taking back their foreign earnings.”

The MAN president said about 10 companies had indicated its plan to close shop before the end of the month.

He said with each of these companies employing an average of 200 people, a total of 2,000 workers would be affected if they decided to shut down their operations.

He said, “A number of our companies have formally written to us that they are going to close shop. Currently, we have about 10 companies that have written us informing us that they are running out of raw materials and that by the end of this month, they may close down.

“We do know that it is going to be more towards the end of the first quarter because many of them that have raw materials that can’t replenish them are likely to shut down.”

Jacobs called on the government to revisit the ban on 41 items from accessing the forex from the official window, especially items considered essential raw materials for manufacturing.

He said, “Many companies that have applied for foreign exchange for even those items that are not on the 41 ban list are finding it difficult to access foreign exchange from the central bank. So, we are calling on the CBN to make foreign exchange available for essential raw materials.”

Punch

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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