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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.
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.
“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.
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.
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.
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.
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.
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.”
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.
News
Aviation labour bodies give airline operators 72hrs deadline over unionization, TSC
The National Union of Air Transport Employees (NUATE) and the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) have issued a three-day notice of strike to Nigeria’s domestic airlines, accusing the operators of blocking workers from unionising and non-remittance of ticket sales charges owed to the Nigerian Civil Aviation Authority (NCAA).
In a statement issued at the weekend, the unions said they were escalating the issue after the warning they gave on August 4, when the unions announced a notice of picketing and declared they were prepared to strike “at any time without further notice.”
Describing the latest move as a gesture of restraint, the unions said they were giving the airlines a further three days to address their grievances before industrial action begins. In the statement, the unions accused airlines of two major infractions.
They alleged that airlines have made it impossible for members of staff to join unions freely, despite repeated efforts by the aviation unions to secure that right.
They said workers are too afraid to even express interest in union membership for fear of discrimination.
The unions also accused the airlines of withholding a 5% charge on ticket sales that is meant to fund the operations of aviation agencies. According to the statement, the non-remittance of these funds has stalled the implementation of collective bargaining agreements already negotiated on behalf of union members.
The statement read: “In relaxing the notice of picketing, dated 4th August 2026 by our unions, with a statement that we were ready to strike at anytime without further notice, we hereby magnanimously issued a 3-day Notice of Strike upon the defaulting domestic airlines principally for the following infractions:
”Making unfettered unionization of staff in their organisation impossible after several efforts by the aviation unions. Their workers dare not even express the intention to belong to unions of their choices.
”Non-remittance of the already collected, but withheld 5% ticket sales charge, which is the operational fund of the aviation agencies, thereby rendering our members negotiated collective bargaining agreements at the aviation agencies nugatory so far. This continues to breed disgruntled air transport workers; the implication of which is an accident in the waiting!
“We want unequivocal declarations through circulars and other direct means of communication to their staff that they are free to join unions of their choices without fear of victimisation.
We want an immediate remittance of the seized operational funds of the aviation agencies to allow for the implementation of the conditions of service of our members in the various aviation agencies.”
News
NERC dissolves Kaduna Disco’s board over N456bn debt
The Nigerian Electricity Regulatory Commission (NERC) has assumed direct control of Kaduna Electricity Distribution Plc (Kaduna DisCo), dissolving the utility’s board and stripping its core investor of management authority over a N456 billion debt.
NERC said in an order dated August 10 that Kaduna Electricity, known as Kaduna DisCo, is in a “grave situation” marked by prolonged default, weak commercial performance and a balance sheet where liabilities have outrun assets.
The regulator invoked its intervention powers under sections 75 to 79 of the Electricity Act 2023, the strongest tool available to it short of revoking the company’s license outright.
“The commission therefore is obliged to act in the public interest and to safeguard continuity of distribution services in KAEDC’s network area,” the order states, citing the risk that further delay could trigger an unplanned collapse of service and expose Nigeria’s electricity market to systemic risk.
Kaduna DisCo’s cumulative market debt had climbed to roughly N456.5 billion as of May, split between N415.5 billion owed to the Nigerian Bulk Electricity Trading Plc and N41 billion owed to the system operator, according to the order.
The utility has also built up N14.26 billion in other statutory and third-party obligations, and has racked up more than N118.6 billion in additional market debt since ASI Engineering Limited took over operations in June 2024.
Kaduna DisCo paid just 41.93 percent of its adjusted market invoices in the year through December, leaving a shortfall of about N46.71 billion, the regulator’s data show.
That underperformance tracked losses across the network; aggregate technical, commercial and collection losses averaged 71.88 percent for the year, meaning the utility billed for barely more than a quarter of the power it received.
Capital investment lagged even further behind commitments. Actual spending in 2025 came to about N2.48 billion against a required minimum of N24.51 billion, a shortfall the regulator pinned largely on the commission’s own forbearance rather than any acceleration by the investor.
Meter coverage, meanwhile, stayed below 36 percent of customers throughout the year despite repeated industry-wide pushes to close the metering gap.
NERC had conditionally cleared ASI’s plan to acquire 60 percent of Kaduna DisCo in January 2024, working alongside a technical partner, Akanksha Power and Infrastructure Limited.
That approval carried a list of conditions, proof of the partner’s operating capacity, a compliance roadmap, bank guarantees to the market operator and trading company, and management vetting, among others, that the regulator said were never fully satisfied even after ASI assumed day-to-day control.
In a letter dated August 25, 2025, ASI told the commission it had met and was sustaining the approval conditions, pointing to restructured technical teams, loss-reduction and metering projects, and efforts to arrange equity and debt financing. Regulators found the supporting evidence insufficient. “The supporting submissions… did not provide adequate evidence of compliance with the conditions,” the order says, adding that documentation for planned infrastructure and technical-advisory work was missing.
Talks came to a head after the commission warned Kaduna DisCo’s shareholders and the Africa Export-Import Bank in a formal notice that an intervention was imminent unless a credible financial rescue plan materialised.
Representatives of the investor group met regulators, the Bureau of Public Enterprises, Afrexim and Fidelity Bank at Afrexim’s offices on June 11. All parties agreed at that meeting that ASI had not met the original takeover conditions or separate requirements set by the Bureau of Public Enterprises for finalising the share sale.
ASI asked for as much as 24 months more to stabilise cash flow and reach full market remittance. The commission, working with the Bureau of Public Enterprises and Afrexim, rejected the request, concluding that a further extension of similar length was not justified given the continuing risk to customers and the market, and that ASI had failed to back the request with a credible plan.
Under the order, KAEDC’s board is dissolved and its directors removed, with a seven-member interim board of special directors, chaired by Abdullahi Garba and including a representative from the Bureau of Public Enterprises, installed for an initial six-month term.
The utility’s incumbent managing director, Abubakar Umar Hashidu, has been retained as administrator to run day-to-day operations, while background-clearance approvals for the wider management team have been withdrawn pending revalidation.
Afrexim will lead a competitive process, coordinated with the regulator, to find a replacement core investor within 12 months, with interim milestones for transaction documents, bidder shortlists and financing terms due at 60, 180 and 270 days. Prospective bidders will need to show working capital, a five-year turnaround plan and bank guarantees covering at least three months of market invoices.
News
Visa processing shift won’t affect Abuja embassy operations – US
The United States Mission in Nigeria has clarified that the ongoing realignment of routine visa processing in Africa will not affect the operational status of the US Embassy in Abuja.
The clarification followed the United States Department of State’s announcement that routine visa services in Abuja would be realigned to a regional visa hub with effect from August 1, 2026.
The US Mission Nigeria, in a post on its official X handle on Monday, said the change was limited to routine visa processing and would not result in the closure of the embassy.
“The realignment of routine visa processing does not change the operating status of any of the embassies and consulates or the important work they continue to conduct on behalf of the American people,” the mission said.
The Department of State had, in a notice published on its website on July 15, said it was realigning visa operations in Africa to regional hubs as part of efforts to strengthen national security, improve efficiency and promote more uniform screening, vetting and adjudication standards.
It said the measure was part of a long-standing practice and that similar realignments had previously been implemented in several African countries and in Europe.
“Effective August 1, 2026, the Department of State will realign routine visa services in Antananarivo, Abuja, Asmara, Bamako, Banjul, Brazzaville, Bujumbura, Conakry, Cotonou, Durban, Freetown, Gaborone, Harare, Juba, Libreville, Lilongwe, Lusaka, Maputo, Maseru, Mbabane, N’Djamena, Niamey, Nouakchott, Ouagadougou, and Windhoek to a regional visa hub,” the department said.
Under the new arrangement, citizens and residents of affected countries seeking US visas on or after August 1 are required to schedule appointments and pay the applicable visa fees at designated nonimmigrant or immigrant visa locations.
For Nigeria, Lagos is listed among the US posts that will serve as a regional visa hub.
The State Department listed Abidjan, Accra, Addis Ababa, Cape Town, Dakar, Dar es Salaam, Djibouti, Johannesburg, Kampala, Kigali, Kinshasa, Lagos, Lomé, Luanda, Malabo, Monrovia, Nairobi, Port Louis, Praia and Yaoundé as the regional visa hubs for routine visa services.
It explained that all routine visa services were affected by the realignment, covering both nonimmigrant and immigrant visas.
“These include tourist and business-related nonimmigrant visas, as well as petition-based nonimmigrant visas,” the department said.
It added that immigrant visa services being realigned include immediate relative, family preference and employment-based categories, as well as fiancée/fiancé visas, adoptions, Diversity Visas and follow-to-join asylee and refugee cases.
The department, however, said the realignment would not affect existing valid visas.
“This does not affect any currently valid visas,” it said.
It also advised applicants who already have appointments scheduled at posts where routine visa services are being discontinued to check their email for specific guidance.
The department said applicants who had paid the Machine Readable Visa fee at a post where only limited nonimmigrant visa services would remain should schedule their appointment by July 31.
“By July 31, you should schedule an appointment at the post where you paid the fee,” it said.
The Mission added that the fees would not be refunded if applicants failed to schedule an appointment by the deadline.
The US also said affected immigrant visa applicants could undertake their mandatory medical examinations in their home countries where panel physicians were available or at their designated regional visa hubs.
The department stressed that visa suspensions under Presidential Proclamation 10998, visa bond requirements and immigrant visa pauses affecting certain nationalities remained in force.
The clarification by the US Mission Nigeria means that while routine visa processing is being moved from Abuja to the designated regional hub in Lagos, the US Embassy in Abuja will continue to operate and provide other diplomatic and consular functions.
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