Abeokuta: The Manufacturers Association of Nigeria (MAN), Ogun branch, has called on the Federal Government to take urgent and concerted action to resolve the ongoing foreign exchange scarcity and surge in dollar prices. Mr. George Onafowokan, Chairman of MAN Ogun, made the call at the association’s 39th Annual General Meeting (AGM) on Tuesday in Abeokuta.
According to News Agency of Nigeria, the theme of the meeting was ‘Dollar to Naira Cost: The Nigerian Manufacturers Daily Dilemma: Exploring Strategies for Business Sustainability’. Onafowokan noted that the foreign exchange scarcity and hike in dollar rate have greatly hindered manufacturing sector operations, affecting business sustainability. The chairman, who is also the Managing Director of Coleman Wires and Cables Industries Ltd., highlighted how the foreign exchange crisis has severely hampered the production capabilities of Nigerian manufacturers.
He explained that the unavailability of foreign exchange is a pressing issue for the industry, forcin
g many manufacturers to resort to the parallel market with high exchange rate figures. “The situation is worsened following the government’s decision to float the Naira in 2023, pushing the rate to an alarming N1,900 to a dollar by February,” he said. “These fluctuations have significantly contributed to Nigeria’s inflation rate, which soared to 28.92 percent by December 2023.”
Onafowokan also pointed out that the lack of access to affordable foreign exchange for importing essential raw materials and machinery has led to a decline in capacity utilization within the manufacturing sector. He revealed that manufacturers are contending with an unsold product inventory valued at N350 billion, while the sector’s growth rate plummeted to 2.4 percent. In addition to foreign exchange challenges, he cited poor infrastructure and high energy costs as major obstacles affecting the manufacturing sector.
He noted that the state of many roads within Ogun State has led to increased logistics costs and, in some cases, derai
led operations due to road accidents, hence the need for urgent upgrades. Furthermore, the high price of energy and a significant increase in electricity tariffs by the Nigerian Electricity Regulatory Commission add to manufacturers’ burdens. Onafowokan commended the Ogun State Government for its ongoing infrastructure projects and urged faster completion of key road ventures to support the industrial sector.
Onafowokan mapped out several recommendations to mitigate the challenges facing manufacturers in Ogun. These include the need for the state government to streamline taxation systems, enhance road conditions, and promote a ‘Buy Made-in-Nigeria’ policy that encourages local procurement. He lauded members of the Ogun State branch of MAN for their dedication and urged collaborative efforts to navigate the current economic landscape and foster business stability.
Gov. Prince Dapo Abiodun of Ogun State restated his dedication to creating an enabling environment for manufacturers to make their businesses thri
ve. Represented by the state’s Commissioner for Industry, Trade, and Investment, Mr. Adebola Sofola, Abiodun acknowledged the challenges faced by manufacturers. He reaffirmed the state’s commitment to addressing infrastructure and power issues, saying providing solutions is crucial to the growth and sustainability of businesses in Ogun.
Mr. Ola Olabinjo, Managing Director of Skytone Finance Company Ltd., provided strategic financial solutions for manufacturers. Olabinjo suggested measures such as cash flow management, short-term credit options, and currency hedging to help mitigate currency fluctuation risks. He emphasized local sourcing as a critical step toward reducing import dependency and exposure to foreign exchange volatility.
MAN President, Otunba Francis Meshioye, also highlighted the significant challenges manufacturers face due to current monetary policy conditions. According to him, these include exchange rate pressures, and the high costs of diesel and raw materials. He urged the state governme
nt to domesticate the Presidential Executive Order 003, which mandates local patronage by government agencies, to boost demand for Nigerian-made goods.
Meshioye also called for enhanced infrastructure, especially the rehabilitation of federal roads within Ogun State, such as the Atan-Igbesa-Agbara road, to support the efficient movement of goods. He underscored the importance of developing the Ota, Agbara, and OPIC industrial estates and encouraged leveraging the amended Electricity Act to provide affordable and reliable power supply to the industrial zones. Meshioye called on the government to harmonize taxes and levies to ease the financial burden on businesses. A collaborative approach between manufacturers and government at all levels is critical to overcoming challenges and fostering economic growth.