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Job Losses, Factory Closures Loom As Unsold Goods Pile Up — MAN

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Against the backdrop of sustained pressure in the foreign exchange market and high cost of production, the Manufacturers Association of Nigeria, MAN has indicated that inventory of unsold goods is escalating to levels now threatening the existence of companies operating in the production sector of the economy with attendant job losses.

Financial Vanguard’s findings show that as of the weekend the foreign exchange market had recorded over 254 per cent plunge in the value of the naira since flotation of the currency by the Central Bank of Nigeria (CBN) in June 2023.

Recall that the naira traded for N471 per dollar in the official I&E market on June 13, 2023 before the floatation of the currency, but exchanged for N1,665.50 to a dollar as at February 23, 2024 on the Nigerian Foreign Exchange Market (NAFEM), indicating a depreciation of more than 253.6 per cent over the eight-month period.

The forex crisis is also stoking inflation, and coupled with high energy costs, purchasing power has continued plummet, stifling demand for goods.

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Speaking on the impact of this development on the manufacturing sector, Director General, MAN, Segun Ajayi-Kadir, said: “There are reports that across the board, many warehouses and plants of many manufacturing firms are stockpiled with unsold goods manufactured last year.

“The development is as a result of the devastating effects of the exchange rate crisis, inflation, fake and sub-standard goods, smuggling and other macro-economics challenges.

“These had put many manufacturers in a great dilemma in the current year as they are applying brakes on production by watching keenly events in the country to know if there would be improvement in sales in order to create space for fresh production for the year.”

Ajayi-Kadir warned that manufacturers may be forced to halt making new products, leading to workforce down-sizing, since production lines are becoming inactive.

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“The continued naira depreciation against the dollar, and the general forex volatility were forcing manufacturers to have a rethink. No genuine manufacturer could operate successfully and make profit under the current scenario, whereby the naira has been falling sharply more than expected in the country,” he stated.

Highlighting challenges in accessing foreign exchange (forex), Ajayi-Kadir disclosed that manufacturers primarily obtain forex through Bureaux De Change (BDCs), noting that banks typically offer less than 20 per cent of the required amount.

No respite yet There seems to be no respite in sight as the International Monetary Fund (IMF) has warned that the exchange rate of the Naira may further depreciate by about 35 per cent this year, adding that this could lead to inflation rate peaking at 44 per cent.

“Given the absence of local production and the recent liberalization of commodity imports, the exchange rate would likely depreciate further – by an estimated 35 per cent in 2024 – and contribute to a further sharp rise in inflation, peaking at 44 per cent, before monetary policy is eventually tightened sharply,” IMF stated in its February 2024 Post-Financing Assessment and Staff Report.

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Financial Vanguard reports that manufacturing companies have been adopting diverse responses to the situation. A good number of them have been investing in backward integration for sourcing raw materials locally instead of imports that strangulate their finances due to the high exchange rate and scarcity of foreign currency. But some of the manufacturers are scaling down their operations while many have actually suspended operations.

Companies’ woes Against the backdrop of the forex crisis, Nigerian Breweries (NB) Plc recently issued a new price review notification to all its customers in the West Zone.

In the notice to its consumers, NB said: “This is to inform you that we are constrained to review the prices of some of our stock keeping units (SKUs) with effect from Monday 19th February, 2024. This review has become necessary because of continued rising input costs and the need to mitigate the impact.”

SKU is a unique identifier used to track inventory within a business. Nigerian Breweries produces major alcoholic beverages like Star Lager, Gulder, Legend Extra Stout, Heineken, Goldberg, Life, and Star Radler amongst others. It also produces non-alcoholic drinks like Maltina, Amstel Malta, Fayrouz, Climax Energy drink, and Malta Gold.

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In a related development, in December 2023, Procter & Gamble (P&G) said it was leaving Nigeria, after just opening its diaper production line worth $300 million in Lagos in 2017. Other global conglomerates that have announced their exit from the country in the recent past include GSK Plc, Bayer AG and Sanofi SA.

Also last year, Unilever Plc cut some of the products manufactured in Nigeria, while Nestle SA has posted losses from its operations. The main reason for the exodus of these conglomerates is scarcity of dollars that they need to repatriate their earnings, with CBN still struggling to clear a backlog of demand for dollars companies require to pay debts and import raw materials.

This is in addition to a near complete absence of reliable electricity supply and congestion at the nation’s ports.

On short-term measures to alleviate challenges faced by manufacturers, Ajayi-Kadir recommended freezing the rates at which the import of raw materials, spares, and machines is calculated. According to him, this would provide stability for manufacturers, shielding them from the impact of fluctuating currency values and fostering a more predictable business environment.

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He also proposed that the government open new credit sources with rates not exceeding 5 per cent, providing quick wins to alleviate pressure on the manufacturing sector. “Additionally, the government should remove the price verification porter because it’s causing companies to shut down, they are not able to import those raw materials.

“The government should also open new windows for us to source our credit at rates that are not lower and that are not higher than 5 percent. “These are very quick wins that the government can do that can lower the pressure that is upon the manufacturing sector,” he said.

The MAN DG also emphasized the importance of promoting domestic production. “Historically, we have not prioritized our domestic economy or encouraged local production. Without local production, we cannot control the exchange rate or achieve a positive rate. Our reliance on imports leads to continuous pressure on the Naira to pursue the Dollar, resulting in an unfavorable exchange rate,” he stated.

On his part, Dr Femi Egbesola, President, Association of Small Business Owners of Nigeria (ASBON), blames the forex crisis on unrealistic and inconsistent fiscal and monetary policies. “So many policies of the government this past time have done more damage than good to the forex market.

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To get a different result, something must just be done differently,” he said. On what the forex crisis portends for small businesses, Eg-besola stated: “Existence of more micro and small businesses are further threatened. Many more businesses are closing down or are in an ailing situation.

“This results to more job losses, loss of revenue to government because dead businesses can’t pay taxes and levies, discourages foreign investment and local investors, increases crime and insecurity, for jobless ones will look for other means of survival, mostly illegal means, owners of businesses are now abandoning their unproductive and unprofitable businesses to relocate overseas, higher inflation rate and more.”

He advised that small businesses need to be more creative and innovative now more than ever before. “Business owners need to begin to diversify to foods and daily need products. More attention should be on exportable products that can earn forex.

“SMEs should adopt the use of technology now more than ever before. Technology adoption will significantly reduce business cost. SMEs need to invest in online marketing and advertising of their products and services. This breaks borders and opens bigger markets. “SMEs should begin to take advantage of the African Free Continental Free Trade Area (AfCFTA) opportunities to sell their products and services to other African countries without the statutory levies and taxes. This will lead to increase in sales and eventually push up productivity and profitability,” he added.

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In his comment, Dr Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise (CPPE), said: “The depreciation of the naira exchange rate is an inevitable outcome of the current economic reforms. The primary objective is to correct the distortions in the foreign exchange market which had lingered for some time.

Admittedly, the economic, social and political costs are quite high. “The main anchor of the reform is the unification of the exchange rate, between the official and parallel markets. The challenge has been that our foreign reserves are not robust enough to make the process less painful.

The economy is still grappling with a major forex liquidity crisis.” Yusuf added that the implications of the current crisis for investors and citizens are multifaceted. “They include: intense inflationary pressures; escalating production and operating costs across all sectors of the economy; erosion of profit margins as businesses could not significantly transfer increased costs to consumers.

“Businesses that have foreign exchange exposure are under severe pressure; businesses with foreign shareholders are struggling to deliver value to their offshore shareholders because of the erosion of domestic currency value; and planning has become difficult for many investors because of the current volatilities.”

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He said that the current policy reforms are expected to ensure stability in the short to medium term, adding however that the reform architecture needs to be periodically reviewed in the light of the high social costs and market imperfections.

“The trade policy window should be explored to mitigate the current escalating prices and production costs. The recent upward review of the exchange rate benchmark for the import duty computation should be reviewed. Trade costs should generally be moderated to give succour to businesses and citizens.

“Complete and total floatation of the currency should be avoided in the light of glaring market imperfections. CBN should commit to the option of a managed float. The policy choice of complete floating of the naira requires a rethink in the light of the current inflationary outcomes, volatility and mark.

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Statement by the Coalition for the Protection of Democracy in Nigeria

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Coalition throws weight behind Gov Otu’s CoS, says allegations against him are tissues of lies

A Coalition for the Protection of Democracy in Nigeria has thrown its weight behind Dr Emmanuel Ironbar declaring that the allegations against him are all tissues of lies.

This was contained in a statement issued and signed by Dr Gabriel Nwambu on behalf Coalition for the Protection of Democracy in Nigeria stating that:

“The Unwavering Loyalty of Dr. Emmanuel Ironbar and the Futility of Opposition Smear
Campaigns.

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“It has become absolutely necessary to address the recent barrage of false, politically motivated,
and malicious allegations directed at the Chief of Staff to the Cross River State Governor, Dr.
Emmanuel Ironbar.

” As the Convener of the Coalition for the Protection of Democracy in Nigeria,
I stand to categorically set the record straight regarding the impeccable character and
undisputed loyalty of a man who has given his all to the success of Governor Prince Otu’s
administration.

“Recently, certain opposition figures and clandestine elements have orchestrated a campaign of
calumny, falsely claiming that Dr. Ironbar controls government appointments and unduly
influences the administration.

“Let it be known that these spurious allegations, designed to mutilate his impeccable integrity
and subject him to public ridicule, are baseless, dead on arrival, and ill-fated.

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“A Track Record of Proven Loyalty
Dr. Emmanuel Ironbar is a leader whose dedication and loyalty to His Excellency, Governor
Prince Otu, are not just absolute, but historically proven. When Governor Otu faced immense
political challenges and fair-weather allies turned their backs, Dr. Ironbar stood firmly by his
side. He offered his unwavering support when it mattered most.

“Common sense and history dictate that a man who believed in you and fought for your mandate
when nothing was happening cannot and will not undermine you when success arrives. Dr.
Ironbar’s loyalty is rare, tested, and ranks among the strongest in our modern political
leadership. He remains an unrepentant loyalist and a deeply focused aide.

“A Disciplined Public Servant
To suggest that the headline Chief of Staff operates independently or usurps the Governor’s authority is a
deliberate attempt to mislead the public and distract this administration.

“The facts are clear:
● Total Subordination: Dr. Ironbar is a man who acts strictly at the instructions of Governor
Otu. Every action he takes is a reflection of the Governor’s mandate.

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● Unfeigned Humility: In every interaction and execution of his duties, he consistently
directs all credit, recognition, and respect to His Excellency.

● Administrative Focus: His primary objective is the seamless operation of the
government, ensuring that the Governor’s vision is executed efficiently.

“A Call for Constructive Engagement
We urge these opposition critics to immediately cease dragging the office and person of the
Chief of Staff into unnecessary, fabricated political controversies.

“You cannot distract a
government that has its eyes firmly set on the prize.

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“Governor Otu’s administration remains united, fundamentally stable, and aggressively committed to delivering good governance through its “People-First” agenda. The Coalition for
the Protection of Democracy in Nigeria will continue to stand against any orchestrated attempts
by detractors to derail democratic progress and vilify dedicated public servants.

“Dr. Emmanuel Ironbar’s integrity remains intact, his loyalty remains unquestionable, and the
desperate plots of his detractors remain doomed to fail.

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Tinubu Orders Security Reinforcement At NIPSS

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President Bola Tinubu has directed the immediate and permanent reinforcement of security at the National Institute for Policy and Strategic Studies (NIPSS), Kuru, Plateau State, following a recent attack on the institution’s perimeter that claimed the lives of two soldiers and a police officer.

The directive was conveyed on Friday by Vice President Kashim Shettima during a visit to the institute, where he addressed participants of the Senior Executive Course (SEC) 48 on behalf of the President.

According to the Vice President, the attack has strengthened the Federal Government’s resolve to protect critical national institutions, support security personnel and ensure that similar incidents do not occur in the future.

Expressing the condolences of the Federal Government, Shettima sympathised with the families of the fallen security personnel and assured them of government support.

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“I come to you with a heavy heart and a firm spirit. A banditry attack on the perimeter of NIPSS claimed the lives of two gallant soldiers and one courageous policeman. To their families, to the Nigerian Armed Forces, and to the Nigeria Police Force, I extend, on behalf of His Excellency, President Bola Ahmed Tinubu, GCFR, and the entire Federal Government, our deepest condolences.

“We mourn with you. We share your pain. And we honour their sacrifice,” he was quoted as saying.

The Vice President announced that President Tinubu had ordered the activation of emergency security measures at the institute, directing the Director-General of NIPSS to work closely with the Armed Forces, the Nigeria Police Force and the Department of State Services (DSS) to strengthen security around the facility.

“His Excellency, President Bola Ahmed Tinubu, GCFR, has directed that emergency security measures be activated at once, with the DG to coordinate with the Armed Forces, the Police, and the DSS to fortify the perimeter without delay.

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“On the President’s order, a comprehensive action plan and timeline for permanent reinforcement, covering surveillance, personnel, access control, and emergency systems, must be submitted to the Office of the Vice President within seventy-two hours. Weekly progress reports will follow until full completion. No future attack must find us unprepared,” he added.

Shettima described NIPSS as Nigeria’s strategic intellectual nerve centre and a vital national asset whose protection must remain a top national security priority.

He noted that although the attackers intended to create fear and disrupt the training of future leaders, the incident instead demonstrated the courage, resilience and discipline of participants, management and security personnel at the institute.

Addressing staff and participants, the Vice President assured them that their safety remained a priority for the Federal Government.

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“Your safety is non-negotiable. The President has directed the immediate reinforcement of security around NIPSS and all strategic institutions. The sacrifice of those three brave men will not be in vain. Their children will be our children. Their welfare will be our responsibility,” he said.

He further stressed that those responsible for the attack would not succeed in undermining the purpose and mission of the institute.

Commending the participants of SEC 48 for their conduct during the incident, Shettima said they had demonstrated qualities befitting future national leaders.

“When darkness came to the gates of this Institute, it expected to find people who would scatter into the night. It found instead men and women who stood their ground.

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“You did not flee. You did not abandon your colleagues. You faced the worst that cruelty could send, and you answered it with composure, with courage, and with the steady discipline of people who understand exactly why they were summoned to this place,” he noted.

The Vice President also praised the Director-General of NIPSS, Ayo Omotayo, for his leadership and swift coordination with security agencies, which ensured the prompt deployment of reinforcements and the safety of participants and staff.

He similarly commended the Director of Studies, Barrister Nima Salman Mann, for maintaining order and coordinating the safety of staff and participants during the crisis.

Earlier, Plateau State Governor Caleb Mutfwang expressed appreciation to the Federal Government for its support and the Vice President’s visit, describing it as a demonstration of empathy and solidarity following the attack.

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The governor approved NIPSS management’s request for the establishment of a buffer zone around the institution, as well as the installation of security lights and other measures to enhance security in the area.

He also paid tribute to the fallen security personnel and praised the bravery of staff and course participants who helped repel the attackers and prevent further incursion into the institute.

In his remarks, the Director-General of NIPSS, Omotayo, presented an incident report to the Vice President and appealed for additional security support, including the deployment of more personnel and the installation of surveillance infrastructure such as CCTV cameras around the institution.

He noted that the attack underscored the vulnerability of critical government institutions across the country and highlighted the need for improved security measures.

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Ekiti Gov’ship Election: INEC Assures Voters Of Credible Poll As CSOs Raise Concerns

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As Ekiti State prepares for Saturday’s governorship election, the Independent National Electoral Commission (INEC) has assured voters of its readiness to conduct a free, fair, and credible poll.

The Resident Electoral Commissioner (REC) in Ekiti State, Bunmi Omoseyindemi, urged eligible voters to participate confidently in the electoral process, stressing that the commission remains committed to delivering a transparent and impartial election.

Speaking with Channels Television, during preparations for the exercise, Omoseyindemi said INEC had resolved all logistical challenges and put adequate measures in place to ensure the timely deployment of personnel and election materials across the state.

He also highlighted the close collaboration between INEC and security agencies through the Inter-Agency Consultative Committee on Election Security (ICCES), noting that the partnership is aimed at guaranteeing a peaceful and secure voting environment.

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The REC further disclosed that the INEC Result Viewing Portal (IReV) would be deployed during the election to enhance transparency by enabling real-time upload and public viewing of polling unit results.

Meanwhile, a coalition of civil society organisations monitoring the election under the European Union Support to democratic governance in Nigeria (EU-SDGN) Election Observation Hub has expressed concern over reports of voter inducement, political intimidation and disinformation ahead of the poll.

At a pre-election press conference, the group alleged that incidents of vote-buying involving cash, food items, and the collection of Permanent Voter Card (PVC) and National Identification Number (NIN) details through pre-funded bank accounts had been reported in parts of Irepodun/Ifelodun, Ikole, Ikere, Ekiti East and Ekiti West Local Government Areas.

The observers also raised concerns over the spread of misinformation on social media, including unverified claims regarding the use of cloned PVCs to manipulate election outcomes.

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While describing the overall security situation in the state as largely peaceful, the coalition urged political parties, candidates and their supporters to refrain from vote-buying, intimidation and the dissemination of false information.

The group also called on security agencies to remain professional and neutral throughout the electoral process, while encouraging voters to exercise their democratic rights freely and without fear, coercion or inducement.

The 2026 Ekiti State governorship election will hold on Saturday, June 20, across the state’s 16 local government areas, with more than 1 million registered voters expected to decide whether Governor Biodun Oyebanji secures a second term or a new leader emerges.

According to INEC, a total of 1,059,360 registered voters are eligible to participate in the election, which will be conducted across 2,445 polling units located in 177 wards. Voting is scheduled to commence at 8:30 a.m.

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Authorities have also announced a statewide restriction on vehicular movement from midnight until 6:00 p.m. on election day to facilitate the smooth conduct of the exercise.

Although 14 candidates are contesting the election, with Governor Biodun Oyebanji of the All Progressives Congress (APC), Oluwole Oluyede of the Peoples Democratic Party (PDP), and Dare Bejide of the African Democratic Congress (ADC) as the leading contenders.

INEC has confirmed the distribution of sensitive election materials to local government areas and assured voters of the readiness of the Bimodal Voter Accreditation System (BVAS).

Security agencies have also deployed personnel and operational assets across the state, particularly in border communities and other strategic locations, to maintain law and order throughout the electoral process.

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Civil society organisations monitoring the election have urged residents to participate peacefully and responsibly, emphasising the importance of safeguarding the integrity of the democratic process.

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