MAN DG: Going to court over unsettled FX backlog not an option

The Manufacturers Association of Nigeria (MAN) has denied reports on plans of going to court over unpaid foreign exchange (FX) backlog of members.

Segun Ajayi-Kadir, director-general of MAN, spoke in a recent interview with TheCable.

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

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

On April 15, a report had said the association may head to court over unpaid FX backlog by banks, stating that members still had dollar unsettled requests.

Reacting to the claim, Ajayi-Kadir said efforts are in place to resolve the backlog issues.

He also said going to court is “never the best alternative”, adding that businesses cannot wait for court verdicts.

“No, I do not think that this should get to the courts. Because like I said, we are already in talks with the CBN and the minister of industry, trade and investment is intervening and we will continue to have this conversation with the CBN,”  Ajayi-Kadir said.

“The court is never the best alternative. I mean, the court also has its process and there are several layers of jurisdictions and you may remain endlessly in court and your business cannot wait for the verdict.

“So, I believe the CBN in view of other measures they have taken, have demonstrated tremendous efforts, and initiatives that are supposed to improve the economy.

“I believe as we continue to engage the CBN and try to convince them that they should let it go because the transactions are properly done, the profits have been repatriated for the efforts that have taken place.

“So, what should be focused on is whether there was a transaction, whether it was done legitimately or fulfilled all the requirements asked for. And if we have done that, I do not think there should be any delay in letting it go.

“That is the direction we are looking at. And like I said we are engaging and we will continue to engage with the CBN till the matter is resolved. 

“Going to court is never anybody’s best choice and I do not think that it will resort to that I believe that the CBN governor is going, to with time, appreciate the issues we have raised and recognise the very negative impact that this continues to have on Nigerian manufacturing and then they will be able to find an amicable solution to it.”

‘80% OF MANUFACTURER’S PROFIT NOT SPENT ON DIESEL’

Further speaking with TheCable, Ajayi-Kadir also denied another report that said manufacturers spend 80 percent of their profits on diesel

He said such a conclusion is not possible, adding that he did not grant the interview.

“I never granted that interview. In terms of our cost structure as a manufacturer, the cost of power could be anywhere between 30 percent to 40 percent depending on how intensive your manufacturing process is,” the MAN president said.

“What I could have said is that the price of diesel has risen in recent times by that percentage, but I never said it’s 80 percent.”

According to Ajayi-Kadir, if 80 percent is spent on diesel, other costs of production will be affected.