350 Nigerian firms shut down since 2015 –Stakeholders

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Business News

Monday, December 9,2019

No fewer than 350 companies may have shut down operations in Nigeria since 2015 following the harsh operating environment triggered by the Federal Government’s economic policies, including the foreign exchange restriction placed on 41 items by the Central Bank of Nigeria (CBN).

Industry stakeholders who spoke to Daily Sun, said about 50 of the affected 350 firms were engaged in manufacturing sector before being suffocated by the harsh operating environment.

According to the Manufacturers Association of Nigeria (MAN), while some of the affected manufacturers relocated their businesses to neighbouring countries, at least 222 small-scale enterprises had  closed down their operations in the heat of the crisis, thereby throwing an estimated 180,000 Nigerians into the labour market.

The Director, Economics and Statistics at MAN, Mr. Ambrose Oruche, lamented the unavailability of production inputs for most members of the Association, stating it remained a major challenge confronting manufacturers.

He attributed the much of the problem confronting Nigerian producers largely to the foreign exchange ban by the CBN on certain items from accessing the official window of the market, adding that the current operating environment remained too harsh for many manufacturers to continue in business.

He wondered why for instance the CBN and the Federal Government kept coming out with what he described as conflicting polices that negatively affect the growth of the manufacturing sector.

He said: “Presently, about 50 manufacturers have closed shop, while some have downsized. Some manufacturers are still producing for the  love their promoters have for thecountry.

Government’s policy on cement should have been adopted in this case, because in the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible that today, we are a net exporter of the commodity.”

Oruche said the fact that the economy suffered some technical recession recently  should have made the CBN to redirect its policies towards stimulating the economy rather than tightening money supply.

He also listed high interest rate, poor power supply, policy inconsistency, poor patronage of locally manufactured products, poor supporting infrastructure among the many challenges confronting the countries manufacturers.

In his remarks, a former Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), Dr. Vincent Nwani, said these unhealthy developments could lead to the death of more organisations in the economy. “There must be an urgent  review of  industrial policy  of the manufacturing sector, especially as the country lacks the capacity for optimal production of most items.”

For instance, he said the ban on oil palm alone had led to the loss of about 100,000 jobs over the last couple of months, while the ban on glass and glassware resulted in 80,000 job losses, mainly in the pharmaceutical industry.

Nwani said many companies in the pharmaceutical sector now find it difficult to package their products to the ban. He said:  “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand in the country is put at about 1.8 million metric tonnes. “Today, Presco Oil has orders of up to December 2019 to fill, it is presently hard pressed with demands.

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