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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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Unite for Change: Nigerians Urged to Protest Peacefully to Avoid Economic and Social Fallout

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In light of the upcoming protests planned across Nigeria, we urge all citizens to engage in peaceful demonstrations. It is crucial to express our grievances and demand change without resorting to violence, which only exacerbates the issues we face as a nation.

Recent examples from around the world highlight the destructive outcomes of violent protests. In *France, the yellow vest protests, which began as peaceful demonstrations against fuel tax increases, escalated into violent clashes with police, resulting in significant property damage and injuries.

Similarly, in **Chile*, protests over economic inequality and living costs turned violent, leading to widespread destruction and a heavy-handed government response. These instances serve as a reminder that violence undermines the legitimacy of protests and often leads to severe repercussions for all involved.

In a recent interview with Victor Walsh Oluwatemi, the Chief Executive of the Africa Development Studies Centre (ADSC), he emphasized the importance of non-violent protests.

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“We must learn from the recent events in *Kenya*, where protests against rising living costs and economic hardships turned violent, resulting in severe economic disruptions and further strain on the country’s fragile economy,” Oluwatemi stated. “The violence not only led to loss of lives and property but also scared away investors, causing long-term damage to the nation’s economic prospects.”

We acknowledge the frustrations and hardships that many young Nigerians face. With high unemployment rates and limited opportunities, it is understandable why the youth might feel they have nothing to lose. However, resorting to violence is not the solution. Violence only leads to more suffering and delays the progress we seek.

“We understand the deep frustrations felt by our youth,” said Oluwatemi. “But history has shown us that non-violent movements can bring about significant and lasting change. The Civil Rights Movement in the United States and the Indian Independence Movement led by Mahatma Gandhi are prime examples of how peaceful protests can lead to meaningful and transformative outcomes.”

To ensure our message is heard and to bring about the change we desperately need, we must remain united in our commitment to non-violence. We urge community leaders, activists, and all citizens to advocate for peaceful protests and to discourage any form of violence. Let us stand together and show the world that we can demand justice and change without compromising our principles or endangering our communities.

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EXPOSED! How they tried to bribe Justice Nwosu-Iheme but she refused-Hon EJ

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A Federal Commissioner of the Code of Conduct Bureau, Honourable Ehiozuwa Agbonayinma has recounted how Justice Chioma Nwosu-Iheme of the Supreme Court was kidnapped when she was ruling on a case that deals with electoral fraud which involved him as a candidate in an election.

He accused INEC of rigging the election, pointing out that the perpetrator was apprehended by the DSS.

He noted that they had brought the culprit before both a tribunal and a court. However, he stated that despite the evidence provided by the DSS, the tribunal’s chairman dismissed the report as inconsequential.

He further recounted how the appeal process unfolded, particularly highlighting the integrity of Justice Iheme Nwosu. He alleged that despite attempts to bribe her, Justice Nwosu remained steadfast and was subsequently kidnapped, an ordeal during which her police orderly and driver were tragically killed.

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He said in an interview with Channels TV, ”I contested for Election and my mandate was stolen. INEC rigged the election and the man who did it was caught by the DSS. The DSS did a fantastic investigation and they took the man to court, they took him to the tribunal.

The Chairman of the Tribunal said the DSS report is inconsequential. At the end of the day, we went to appeal Court and the Appeal Court Judge, Justice Iheme Nwosu who is a wonderful woman.

They tried to bribe Justice Nwosu but she refused and she was kidnapped, they killed her police orderly and her driver. She was in captive for over 30 days and today that woman is now the Justice of the Supreme Court. That is the kind of woman that should be celebrated in this country.”

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Speaker Abbas endorses MoU with UN CEDAW on women empowerment

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…says Reps open to partnership with CSOs, others on gender equality

By Gloria Ikibah

The Speaker of the House of Representatives Hon. Abbas Tajudeen, on Tuesday, signed a Memorandum of Understanding with the Office of the United Nations Committee on the Elimination of Discrimination Against Women Nigeria Member (OCEDAWNM) on legislative interventions on issues affecting women.

At the epoch ceremony, Speaker Abbas restated the commitment of the 10th House, under his leadership, to empowering women and ensuring gender equality in politics, governance and other spheres of life.

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Speaker Abbas pointed out that the MoU “uniquely attests to recognition of the need to marshal out diverse resources to achieve our 2024 International Women Development (IWD) themed: ‘Inspired Inclusion.’”

He said: “It is barely one week after my endorsement of a similar Parliamentary Development Programme for the 10th House sponsored by the United Nations Development Programme (UNDP) for capacity building of members and staff of the House of Representatives.

“We are here again this afternoon to enter another working agreement with the United Nations group on the Elimination of Discrimination Against Women to promote the vision of our Legislative Agenda on inclusion and affirmative action for good governance.

“There is no better way to underscore the dedication of the House towards rebuilding the confidence of our people through pragmatic citizen’s engagement and capacity strengthening.”

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The Speaker said given the huge gender gaps in many sectors, there was the need for proactive measures to consolidate the 10th House Legislative Agenda’s vision of promoting inclusion and affirmative action for good governance, and promoting innovative and technology-based approaches to stimulate economic growth and ensure that no one is left behind in line with the SDG2030 & AU3063 Agendas.

He also said the measures should include harnessing existing opportunities for replicating good practice models in women’s peace and security, climate change management and renewable energy, and fin-tech, e-commerce and market access that could expand livelihoods and catalyse economic revival at the grassroots level.

He stressed the need to rebuild confidence in the people through pragmatic citizen engagement and capacity strengthening for key stakeholders as duty-bearers and rights holders.

Speaker Abbas added: “I urge our development partners, private Sector Companies and civil society associates to identify pillars in the partnership log frame where they can collaborate maximally to help realise concrete and transformative results

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“I look forward to receiving the out ones of your first contact meeting with details of priority interventions, strategic actions with timelines that will help utilize our eight-fold legislative mandate to advance our global and regional obligations in a way that responds to our local realities and contexts.

“The House will provide necessary legislative actions and support for the success of this partnership.”

The Speaker noted that the House recently had an ‘Open Week’ to engage citizens during which the members presented their one-year scorecard in office.

“Nigerians responded with great enthusiasm. The bottom-top approach intrinsic in the Open NASS Week and the unmatched performance of the House as meticulously articulated in the scorecard were greatly acknowledged by Nigerians who attended the Open Week and have largely enhanced our legislative image and heightened people’s confidence in the 10th House as a bastion of the common man,” he said.

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Speaker Abbas added that the House would “continue to engage our constituents because they are the reason we are here.”

The Vice-Chairperson, UN CEDAW, Madam Esther Eghobamien-Mshelia, who led the OCEDAWNM and with whom the Speaker signed the MoU, commended Speaker Abbas and members of the House for their efforts towards gender equality and women empowerment so far, while urging them to implement the agreement towards achieving more results.

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