The Manufacturers Association of Nigeria has said that the appreciation of the naira in recent weeks is insufficient and incapable of inspiring manufacturers’ confidence in the economy.
MAN President Francis Meshioye said the current performance of the local currency was not at a level capable of boosting business confidence, he told Punch News.
He called on policymakers to ensure a sustained run of naira appreciation to ease the forex burden that manufacturers are currently contending with.
Meshioye said, “The trend should be sustained. What everybody is looking for is for the naira to further appreciate to the point where it is bearable for manufacturers and everyone. The temporary appreciation is not enough to give anybody confidence.
“It is when it is stable that we can feel relieved. We are watching to see if the efforts that have brought us to this point have been deliberate and will continue to ensure stability in the future.”
In the same vein, the Director-General of the association, Segun Ajayi-Kadir, said there were still high expectations from manufacturers concerning the continued appreciation of the naira.
According to him, the short-term fixes devised by policymakers to cushion the pains of forex scarcity would not suffice to definitively address the problem.
He said, “Because of the inadequacy of forex, any reduction in the course of procuring forex is a welcome development and a relief for manufacturers. But the current rate is still high.
“We are hoping for a continued improvement in the performance of the naira against the dollar. The only lasting solution is to increase local production because as long as we rely on imported goods, we will continue to depend on international currency and face a scramble for forex.
“There is also the need for us to deliberately promote productivity so that we can be competitive in what we produce and be able to contribute to the forex stock of the country.”
Ezekiel Akhiromen, the General Manager of Royal Foam Products Limited, stated that the current exchange rate did not meet the expected level to ensure profitability.
He said, “Of course, it is affecting us; about 80 percent of what we buy requires forex—the chemicals and other materials come in from outside the country.”
On November 2, reports emerged that the Central Bank of Nigeria had begun clearing the $10 billion forex backlog that had accumulated due to an acute scarcity of foreign exchange in the apex bank’s reserves.
The succeeding weeks have seen significant appreciation of the naira, which had slumped to N1,250/$ by late October.
