MAN Seeks CBN Intervention as Foreign exchange Dispute Worsens

The Producers Affiliation of Nigeria (MAN) has decried what it described as “unwholesome remedy” of its members by some industrial banks over unmet international trade ahead obligations, calling on the Central Financial institution of Nigeria to intervene because it warns the dispute threatens the survival of the nation’s manufacturing sector.

In an announcement on Thursday, the Director-Normal of MAN, Segun Ajayi-Kadir, accused industrial banks of imposing “vital unwarranted complexities and undue highhandedness” on producers in contravention of the Central Financial institution of Nigeria’s tips.

“Our members have confronted stringent necessities that aren’t aligned with the Central Financial institution of Nigeria’s tips, leading to pointless bottlenecks and unlawful freezing of their company and private financial institution accounts,” he stated.

He described the banks’ actions as detrimental to producers, who depend on foreign exchange to import vital uncooked supplies and gear not produced domestically.

Citing a case involving the metal producer KAM Industries Nigeria Restricted, Ajayi-Kadir stated the corporate had change into a sufferer of “a foreign exchange forward-related dispute” with a industrial financial institution. He burdened that the KAM case was solely certainly one of many “harrowing experiences” producers are at the moment enduring.

“This could cease within the curiosity of the financial growth of Nigeria, job safety and enterprise sustainability,” he cautioned.

MAN’s DG defined that, below the present foreign exchange association, producers both remit funds immediately or entry credit score via industrial banks to safe foreign exchange. These banks, he added, are then anticipated to switch the funds to the Central Financial institution, finishing the shoppers’ obligations.

“Given this background, MAN asserts that its members aren’t accountable for delays or issues arising after the remittance of funds to the CBN by industrial banks,” Ajayi-Kadir stated.

He insisted that producers have fulfilled their facet of the deal and shouldn’t be punished for points past their management.

“Our members shouldn’t be harassed by the banks. The banks ought to present understanding and be supportive as all of us search an answer to this moderately unlucky and sudden deadlock,” he stated. “It’s unconscionable that producers are bearing the brunt.”

MAN, due to this fact, known as on the CBN to compel the involved banks to unfreeze the accounts of producers caught in the course of the foreign exchange disaster and to “pace up the lengthy overdue redemption of the unsettled foreign exchange ahead.”

The affiliation additionally expressed willingness to collaborate with stakeholders, together with the banks, to discover a lasting answer to the disaster.

“Business banks and producers must be companions that collaborate to construct shared prosperity for the nation, not adversaries,” Ajayi-Kadir famous.

He maintained that MAN stays dedicated to advocating for a beneficial enterprise setting and stopping the looming menace of de-industrialisation.

The newest response from MAN comes amid ongoing considerations surrounding a $2.4bn backlog of matured foreign exchange ahead contracts that stay unresolved by the Central Financial institution.

Disputation of foreign exchange ahead obligations has lingered between producers and industrial banks, with different non-public sector organisations becoming a member of MAN to name for an intervention from the CBN.

Earlier in March, the Director of the Centre for the Promotion of Personal Enterprise, Dr Muda Yusuf, urged the CBN to permit firms affected by the difficulty to submit documentary proof to justify their claims.

“I feel it’s only truthful for the CBN to look into their complaints,” Yusuf said. “If there was any situation with those who weren’t cleared, these firms weren’t invited to defend themselves or to supply additional explanations.”

He suggested the CBN to arrange a verification committee to reassess the claims, stressing that whereas some companies might not qualify, many others would have the ability to validate their contracts if given the chance.

In February 2024, CBN Governor Olayemi Cardoso disclosed that a part of the unresolved $2.4bn ahead contract backlog had documentation irregularities, together with an absence of legitimate import papers. The overall ahead obligations inherited by the present administration stood at about $7bn.