Business

CBN Forex Allocation Inadequate, Say Manufacturers

Published

8 years ago

February 20, 2017

Steel Manufacture At Evraz Plc West-Siberian Metallurgical Plant

CBN Forex Allocation Inadequate, Say Manufacturers

Manufacturers have described the $567.31m allocated to the industrial sector by the Central Bank of Nigeria in the month of January as a drop in the ocean.

The President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, said this in an exclusive interview with our correspondent.

The CBN had stated in a statement on Thursday that it disbursed $2.83bn for importation of various types of equipment to the real sector of the economy between December 2016 and January 2017.

Providing a breakdown of the allocation, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, stated that $609m and $228m were released for raw materials’ importation in December and January, adding that the manufacturing sector got $53m and $71m for raw materials, respectively in the period.

Jacobs told our correspondent that the CBN had informed him of the disbursement of $567.31m to the manufacturing sector in January, but described the amount as a drop in the ocean, adding that it was too small.

Our correspondent, however, learnt that the allocations from the apex bank for the months of December and January did not go round. Most of the manufacturers said they did not get any forex in the months in question.

In the automotive sector, the Chairman, Nigeria Automotive Manufacturers Association, Mr. Tokunbo Aromolaran, said his firm did not get any forex, adding that he did not know if others got.

Aromolaran, who remarked that a situation where somebody asked for $1m and got $100,000 could not be termed as forex allocation, wondered how far $1bn could go to satisfy the needs of all the manufacturers in the country.

In the food processing sector, the General Manager, Erisco Foods, Mr. Adetokunbo Agbede, stated that the firm had not received allocation from the CBN in the past eight months, alleging that forex was being allocated to importers of frozen foods.

However, a few of the industrialists admitted that they got some forex, but said the amounts were nothing compared to what they needed.

“It was minimal compared to what we got in the past,” the Chairman, Pharmaceutical Manufacturing Group of MAN, Mr. Okey Akpa, said.

Jacobs, however, said although the amount was too small, the fact that the CBN was making the forex available was helpful.

He said, “It is good that something is coming. Since they had it in January and December, that means they are making it more regular. If they can continue that way, people will continue in business. Problem arises when they cannot get the forex at all.

“If they are given a little, they can cut down their production and still remain in business instead of shutting down completely. “

The Managing Director of Coleman Wires and Cables, Mr. George Onfowokan, who said his firm got some forex, remarked that even though the amount was not much compared to the demand, the fact that the CBN was now responding with regular interventions was a positive sign and had made positive impact on the few firms that benefitted from it.

He stated, “It has restored confidence in the banking sector, because some of the banks have started opening up their credit lines for their customers based on anticipation of the next intervention.

“The CBN should continue to make the interventions regular. If they do that, even some of the people that did not get will eventually get.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Business

New Website Unveiled by FG for Pay-Later CNG Conversion to Cut Transport Costs

Published

2 days ago

October 10, 2024

Yetunde Olugbenga

The federal government has unveiled a website that offers a pay-later option for commercial and private car owners looking to convert their petrol-powered vehicles to Compressed Natural Gas (CNG).

This was in response to the incessant increase in transportation fares following the removal of the fuel subsidy.

According to the Presidential Compressed Natural Gas Initiative (PCNGi) the initiative will help ease transportation costs and encourage more transporters to embrace CNG.

In a post on X, the National Orientation Agency (NOA) revealed that this initiative ensures a hassle-free experience for CNG users through an easy online application and a quick approval process.

“Switching to Compressed Natural Gas (CNG) is now more accessible than ever. With flexible payment plans tailored to fit your budget, transitioning from petrol to CNG has never been smoother or more affordable. These payment options allow you to convert your vehicle now and pay later with affordable monthly installments at competitive rates.” NOA stated.

The installment payment option aims to achieve the federal government’s projection of a 30-40% fare reduction as more motorists adopt this initiative.

In addition to the distribution of 2,000 CNG-powered tricycles among youths in the transportation sector across Nigeria, the pay-later option is intended to encourage more people to adopt CNG, thereby providing affordable mobility options.

Business

Nigerians Fear Increase in Fake Products as NAFDAC Officials Commence Indefinite Nationwide Strike

Published

4 days ago

October 8, 2024

Ugwoke Ogbodo

There are indications that fake producers of consumables and other items across the country may have a field day following an industrial action embarked upon by workers of the National Agency for Food and Drug Administration and Control (NAFDAC).

Investors King gathered that the nationwide strike which started on Monday is indefinite and nationwide.

The decision of the staff of the agency to down tools followed the expiration of a 14-day ultimatum issued to their management.

The decision to shun work was confirmed after a congress of NAFDAC staff convened on Friday, October 4, 2024 over unresolved issues.

The striking workers, under the directive of the Senior Staff Association of Statutory Corporations and Government-Owned Companies (SSASCGOC) have been instructed to withdraw all services and vacate offices.

They were also ordered to remove personal belongings as the strike began.

The demands of the staff include a review and re-evaluation of the 2024 promotion examination results, which currently reflect a pass rate of just 35%.

The union is pushing for a minimum benchmark of 80% for this year and future exams. Another key demand is the settlement of salary arrears for employees hired in 2022 among others

In a statement signed by Secretary of the Association, Ejor Michael, the union accused NAFDAC management of ignoring their grievances, calling the inaction insufferable.

The staff have vowed to continue the strike until all demands outlined in their communiqué are met.

NAFDAC, which plays a critical role in regulating Nigeria’s food, drug, and pharmaceutical industries, is expected to face significant operational disruptions as a result of the industrial action.

Before now, there had been public outcry over the increase in fake products as Nigerians called out the agency and tasked it to be more proactive.

They expressed fear that there is a tendency that manufacturers of fake products would have ample opportunities to saturate the markets with dangerous products as those who would tackle them are now on strike.

Business

27.75% Interest Rate Painful but Necessary – CBN Gov Cardoso

Published

4 days ago

October 7, 2024

Bassey Marshall

The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has described the recent increase in the Monetary Policy Rate (MPR) to 27.25% as a painful but necessary move.

Cardoso made this known in Lagos, during his address to members of the Harvard Club of Nigeria on the topic: “Leadership in Challenging Times: Restoring Credibility, Building Trust, and Containing Inflation”.

Investors King reported that on September 24, 2024, the apex bank announced another increase in its Monetary Policy Rate (MPR) from 26.75 percent to 27.25%

The decision was reached during the Monetary Policy Committee (MPC) meeting chaired by the CBN Governor.

However, while delivering his speech in Lagos, the CBN boss sympathized with borrowers highlighting the pain the new interest rate will heap on them.

According to Cardoso, the bank’s decision to raise the interest rate was a bold move to reduce excess money in circulation and control inflation effectively.

He emphasized the need for Nigeria to look beyond short-term comfort and strive to secure long-term stability.

Cardoso reaffirmed the CBN’s commitment to rebuilding public trust in the institution.

He said, “Our decision to raise the Monetary Policy Rate (MPR) to 27.25% was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation.

“Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these

“Leading through challenging times means avoiding the temptation to take on too many initiatives. The Central Bank must focus on its core mandate—price stability. It is easy to become distracted by various political and economic pressures, but as a leader, one must prioritise.”

“Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes.

“Our decision to implement the Electronic Foreign Exchange Matching System (EFEMS) is rooted in this understanding.

“By enhancing transparency and providing more accurate oversight of forex transactions, we send a strong signal that the CBN is serious about fair and efficient markets.”

Meanwhile, The Manufacturers Association of Nigeria (MAN) had criticized the interest rate hike by the Central Bank of Nigeria (CBN).

The Director General of MAN, Mr. Segun Ajayi-Kadir, made the association’s position known in a statement titled ‘Reaction of MAN on the Report of MPC Meeting on September 23-24, 2024’.

MAN noted that with the higher interest rate, the cost of production will increase.

According to him, the impact of the increase goes beyond the manufacturers, it will stifle investment opportunities.