Edun to manufacturers: Continue dialogue with CBN to resolve unverified FX backlog issue

Wale Edun, minister of finance and coordinating minister of the economy, has advised the Manufacturers Association of Nigeria (MAN) and other affected parties to continue dialoguing with the Central Bank of Nigeria (CBN) to resolve the foreign exchange (FX) forward contract issues.

FX forward transactions relate to the buying or selling of foreign currencies at a predetermined price on a future date.

Edun spoke on Thursday at the 2024 Access Corporate Forum, in Lagos.

On March 20, the Central Bank of Nigeria (CBN) announced that all valid outstanding FX backlog claims had been settled.

However, according to Olayemi Cardoso, governor of CBN, about $2.4 billion in FX transactions were unverified.

Speaking to TheCable in May, Segun Ajayi-Kadir, director-general of MAN, said so many manufacturers were affected by the unverified transactions.

He said efforts were in place to resolve the backlog, but it appears the issues are yet to be resolved.

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) had, on August 7, said the non-payment of the FX forwards had severely crippled affected companies, pushing many towards bankruptcy.

Speaking on the matter at the event, Edun advised MAN and NACCIMA to keep dialoguing with the CBN for smooth resolution of the matter.

“There is a related matter that MAN raised that has to do with the backlog of unpaid transactions regarding the supply of FX,” the minister said.

“My colleague (Governor of CBN) in the management of monetary policy in a coordinated manner is unfortunately not here and he is the best person to reply on monetary policy matters.

“However, what I will say is that we understand that the central bank is the counterparty to that issue and whatever the issues are, dialogue and continued consultation is really the best answer.”

Edun said the consumer credit scheme would support the purchase of manufactured products, which would be a boom for the manufacturing sector.

He said “in the near future”, Nigerians would be provided with “a near single digit interest rate” on 25-year mortgages to ignite the construction sector.

‘PUT POLICIES TO ACTION’

On his part, Ajayi-Kadir pointed out that successive governments in the country had declared their intention to grow domestic production, but failed to show adequate interest in the growth of the manufacturing sector.

The MAN boss said it is either the lack of total commitment to put policy into action or the sector is crowded out in terms of priorities.

“So, the manufacturing sector in Nigeria has continued to perform at less than 50 percent of its installed capacity,” he said.

Similarly, Chinyere Almona, director general of Lagos Chamber of Commerce and Industry (LCCI), said some government policies are stifling businesses.

Almona said sometimes “the policies are great, but their implementations are zero”.

Speaking also at the forum, Aliko Dangote, president of Dangote Group, stressed the need for government to support local manufacturing.

This, he said, is more effective than travelling abroad to “beg for foreign investments.

“What attracts foreign investment is domestic investment. No domestic investments, no foreign investments!” the billionaire said.

“So, we have to make sure that we support our domestic investors.

“I went to two places on Wednesday and I was a bit angry. I wanted to eat snacks and all the biscuits that I was given in these two different places were made in China, which is wrong.

“If we are consuming made in China biscuits, it means that we are actually creating jobs in China and creating poverty here.

“So, we need to have proper support for domestic industries.”

Dangote also said the federl government must give small businesses all the support “to survive against all these dumping”.