MAN urge CBN to speed up ongoing review of forex management procedures to ensure available forex

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The Manufacturers Confidence Index (MCCI) is an index which Manufacturers Association of Nigeria (MAN) use to gauge the change in quarterly pulsation of manufacturing activities to changes in the macroeconomic ambience and Government policies. According to MAN, MCCI is therefore barometer used by Association to garner the perceptions of 400 Chief Executive Officers (CEOs) of MAN member-companies on changes in the economy.


MCCI also gauges changes in key macroeconomic indicators including sector specific factors that represent Government activities and policy measures in the economy. Consequently, the effects of movements in Foreign Exchange, Lending Rate, Credit to the manufacturing sector and Capital Expenditure of the Government were also measured. 

According to report from 400 Chief Executive Officers of MAN member-companies saying it is difficulty in sourcing forex for importation of raw-materials and machines that are not locally available has been a critical challenge to the manufacturing in Nigeria.  Since the onset of COVID-19 pandemic in the early quarter of 2020, the severity of forex challenge has intensified, particularly as the value of the Naira deteriorated.


Unfortunately, even with gradual return to normalcy of business activities and the increasing recovery of forex earning as crude oil prices improved, acute shortage of forex persisted.


In addition, MAN said though the Central Bank of Nigeria (CBN) has consistently intervened in the forex market (official and BDC windows) but the result has been negligible, particularly in the second quarter of 2021.


“Consequently, 52% of manufacturers interviewed during the fieldwork for the second quarter MCCI, disagreed that the rate at which forex was sourced improved.  While 30% all manufactures interviewed were not sure while only 18% agreed that the rate has improved as depicted in Figure ‘i’.


“On this account therefore, it is critically important for the CBN to speed up the ongoing review of forex management procedures to ensure that available forex in the country is productively utilized.

MAN noted that the index performance underpinned the improvement in the confidence of manufacturers on the economy, although much is still required to ensure that the current momentum in the economy is sustained and improved upon.


“Therefore, this report provided critical recommendations that addressed the various challenges of the manufacturing sector as identified by manufacturers in the quarter under review.  We believe that with the ardent implementation of the recommendations, there would be significant positive change in the business operating environment in the country, it added.


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