MAN Seeks CBN Intervention as Forex Dispute Worsens
The Manufacturers Association of Nigeria (MAN) has decried what it described as “unwholesome treatment” of its members by some commercial banks over unmet foreign exchange forward obligations, calling on the Central Bank of Nigeria to intervene as it warns the dispute threatens the survival of the country’s manufacturing sector.
In a statement on Thursday, the Director-General of MAN, Segun Ajayi-Kadir, accused commercial banks of imposing “significant unwarranted complexities and undue highhandedness” on manufacturers in contravention of the Central Bank of Nigeria’s guidelines.
“Our members have faced stringent requirements that are not aligned with the Central Bank of Nigeria’s guidelines, resulting in unnecessary bottlenecks and illegal freezing of their corporate and personal bank accounts,” he said.
He described the banks’ actions as detrimental to manufacturers, who rely on forex to import critical raw materials and equipment not produced locally.
“This should stop in the interest of the economic development of Nigeria, job security and business sustainability,” he cautioned.
MAN’s DG explained that, under the current forex arrangement, manufacturers either remit funds directly or access credit through commercial banks to secure forex. These banks, he added, are then expected to transfer the funds to the Central Bank, completing the customers’ obligations.
“Given this background, MAN asserts that its members are not liable for delays or complications arising after the remittance of funds to the CBN by commercial banks,” Ajayi-Kadir said.
He insisted that manufacturers have fulfilled their side of the deal and should not be punished for issues beyond their control.
“Our members should not be harassed by the banks. The banks should show understanding and be supportive as we all seek a solution to this rather unfortunate and unexpected impasse,” he said. “It is unconscionable that manufacturers are bearing the brunt.”
MAN, therefore, called on the CBN to compel the concerned banks to unfreeze the accounts of manufacturers caught in the middle of the forex crisis and to “speed up the long overdue redemption of the unsettled forex forward.”
The association also expressed willingness to collaborate with stakeholders, including the banks, to find a lasting solution to the crisis.
“Commercial banks and manufacturers should be partners that collaborate to build shared prosperity for the nation, not adversaries,” Ajayi-Kadir noted.
He maintained that MAN remains committed to advocating for a favourable business environment and preventing the looming threat of de-industrialisation.
The latest reaction from MAN comes amid ongoing concerns surrounding a $2.4bn backlog of matured forex forward contracts that remain unresolved by the Central Bank.
Disputation of forex forward obligations has lingered between manufacturers and commercial banks, with other private sector organisations joining MAN to call for an intervention from the CBN.
Earlier in March, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, urged the CBN to allow companies affected by the issue to submit documentary evidence to justify their claims.
“I think it is only fair for the CBN to look into their complaints,” Yusuf stated. “If there was any issue with those that were not cleared, those companies were not invited to defend themselves or to offer further explanations.”
He advised the CBN to set up a verification committee to reassess the claims, stressing that while some firms may not qualify, many others would be able to validate their contracts if given the opportunity.
In February 2024, CBN Governor Olayemi Cardoso disclosed that part of the unresolved $2.4bn forward contract backlog had documentation irregularities, including a lack of valid import papers. The total forward obligations inherited by the current administration stood at about $7bn.
