Naira Depreciation: 16 Major Firms Lost N792bn in One Year- MAN
The Manufacturers Association of Nigeria, MAN, yesterday said that 16 major manufacturing firms incurred cumulative losses amounting to N792 billion between 2023 and 2024.
Also, Chairman, Ogun State Manufacturers Association of Nigeria, MAN, Mr. George Onafowokan, raised alarm over the unprecedented crisis facing the manufacturing sector following the government’s decision to float naira in 2023.
He said this in his address titled: “Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability”, at the 39th Annual General Meeting of the states chapter of MAN.
Onafowokan who doubles as Managing Director of Coleman Wires and Cables Industries Limited said: “The fall of the national currency has been partially responsible for high inflation rates in the country. As of December 2023, inflation rose to 28.92 percent according to the National Bureau of Statistics. The Federal Government had also through the Nigerian National Petroleum Company Limited got a $2.25 billion oil-for-cash loan facility from the African Export-Import Bank to boost dollar liquidity in the economy.
“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 cited the soaring exchange rate as a key driver of the sector’s challenges, stating that: “This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports.
“Due to the limited availability of forex at official rates, many manufacturers have turned to the parallel market, where rates have skyrocketed, causing a significant rise in production costs. This increase has placed substantial financial strain on businesses that rely heavily on imported raw materials and machinery.”
He lamented that major road networks in the state, critical for transporting goods and materials, remain in disrepair, causing frequent accidents and increasing logistics expenses.
He said: “Recent electricity tariff hikes by the Nigerian Electricity Regulatory Commission have further strained manufacturers’ operational budgets, squeezing already narrow profit margins.”
