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.
“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.”
IBEDC Disconnects UCH Over N500m Debt, Critical Services Affected
The University College Hospital (UCH) in Ibadan, Oyo State, experienced a disruption in its power supply after the Ibadan Electricity Distribution Company (IBEDC) disconnected the hospital over a debt amounting to N500 million.
Dr. Jesse Otegbayo, the Chief Medical Director of UCH, confirmed the disconnection but refrained from elaborating on the exact cause.
IBEDC’s spokesperson, Busolami Tunwase, acknowledged the outstanding debt owed by UCH but denied that the disconnection was intentional.
Tunwase stated that while UCH owed the substantial amount, the power outage was due to a technical fault in the area, coinciding with the debt situation.
Despite repeated attempts to engage UCH in discussions to settle the debt, IBEDC had resorted to disconnection as a last resort.
The disconnection poses significant challenges to UCH’s critical services, affecting patient care and hospital operations.
While IBEDC emphasized its understanding of the hospital’s importance and commitment to resolving the issue amicably, the situation underscores the financial strains faced by healthcare institutions and the essential need for reliable power supply.
Efforts to negotiate and find a resolution between UCH and IBEDC are ongoing to restore normal operations and ensure uninterrupted healthcare services.
Oil and Gas Dealers Threaten Withdrawal as 70% of Downstream Businesses Collapse
The downstream oil sector in Nigeria faces a looming crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), issue a stern warning of potential service withdrawal.
In a recent resolution following their executive committee meeting in Abuja, NOGASA expressed grave concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating environment.
President of NOGASA, Benneth Korie, highlighted the dire situation, emphasizing the challenges faced by oil marketers in funding operations amidst soaring bank interest rates.
Korie underscored the overwhelming burden faced by operators who are compelled to acquire funds at exorbitant interest rates upwards of 30%, exacerbating financial strain and hindering business viability.
The primary demand voiced by NOGASA is the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically.
Failure to address these pressing issues, Korie warned, could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.
The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.
However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.
As Nigeria navigates through turbulent economic waters, stakeholders eagerly await decisive action from authorities to salvage the downstream oil sector from imminent collapse and avert potential disruptions in fuel supply chains.
Developers Reject Federal Government’s Cement Price Reduction Agreement
Billionaire Watch4 weeks ago
MacKenzie Scott Sells Off $10.4 Billion Worth of Amazon Shares
Naira4 weeks ago
Dollar to Naira Black Market Exchange Rate January 26th, 2024
Fintech4 weeks ago
Opay’s Deadline Looms: Users Urged to Update BVN and NIN to Avoid Transaction Restrictions
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 25th, 2024
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 1st, 2024
Company News3 weeks ago
UAC Posts N12.7 Billion Profit Before Tax in 2023
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 2nd, 2024
Banking Sector3 weeks ago
CBN Accuses Banks of Hoarding $5 Billion in Foreign Currencies