16 manufacturing firms lost N792bn to naira depreciation – MAN
The chairman of the Ogun State Manufacturers Association of Nigeria (MAN), George Onafowokan, has lamented the crisis in Nigeria’s manufacturing sector following the government’s decision to float the Naira in 2023. According to him, 16 major manufacturing firms have incurred cumulative losses amounting to N792 billion due to naira depreciation. He spoke at the 39th […]
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The chairman of the Ogun State Manufacturers Association of Nigeria (MAN), George Onafowokan, has lamented the crisis in Nigeria’s manufacturing sector following the government’s decision to float the Naira in 2023.
According to him, 16 major manufacturing firms have incurred cumulative losses amounting to N792 billion due to naira depreciation.
He spoke at the 39th Annual General Meeting of MAN, Ogun State branch, on Tuesday, with the theme, “Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability.”
He highlighted the soaring exchange rate, which has surged to NGN1,900 to $1 by early 2024, as a key driver of the sector’s challenges.
“This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports,” Onafowokan stated.
He said due to the limited availability of forex at official rates, many manufacturers have turned to the parallel market, where rates have skyrocketed to NGN900 to $1, causing a significant rise in production costs.
He said the increase has placed substantial financial strain on businesses that rely heavily on imported raw materials and machinery.
“The manufacturing sector incurred significant forex losses in 2023, which extended into 2024, forcing many manufacturers to either temporarily suspend or completely halt their operations.
“In fact, approximately 16 major manufacturing companies lost a combined total of N792 billion due to the depreciation of the naira resulting from monetary policy reforms. The impact on SMEs and smaller manufacturers has been equally devastating,” he said.
Onafowokan also highlighted the added burdens of inadequate infrastructure and rising energy costs.
He noted that key roadways in Ogun State, critical for transporting goods and materials, remain in disrepair, causing frequent accidents and increasing logistics expenses.
Acknowledging the Ogun State government’s efforts to improve infrastructure, Onafowokan urged the administration to expedite ongoing projects to relieve some of the pressure on manufacturers.
He also called for a more efficient tax system and proposed a “Buy Made-in-Nigeria” initiative to stimulate local demand and provide much-needed support for the struggling sector.