The Manufacturers Association of Nigeria (MAN) has expressed deep concerns regarding the unwholesome treatment of its members by some commercial banks in Nigeria regarding unmet foreign exchange (forex) forward obligations.
In a press statement signed by the Director General of MAN, Segun Ajayi-Kadir mni, on Thursday, manufacturers stressed that they rely heavily on access to forex for the importation of essential raw materials, machinery, and equipment that are not locally available.
“Recent developments have shown a troubling trend in the way banks are handling the unmet foreign exchange obligations, to the extreme detriment of manufacturing industries who have the needless misfortune of being at the receiving end of a problem they didn’t create and shouldn’t suffer.
“Our members have reported significant unwarranted complexities and undue highhandedness by the banks. Many have faced stringent requirements that are not aligned with the Central Bank of Nigeria’s (CBN) guidelines, resulting in unnecessary bottlenecks and illegal freezing of their corporate and personal bank accounts, with negative impact on production, which could threaten the sustainability of manufacturing operations,” part of the statement read.
It highlighted a worrisome case in the ongoing forex forward related dispute involving KAM Industries Nigeria Limited, a leading manufacturer in the steel sector in West Africa and a member of the association, and one of the commercial banks in Nigeria.
“This rather unfortunate treatment of private business is only the reported one, and there are several others undergoing similar harrowing experiences. This should stop in the interest of economic development of Nigeria, job security and business sustainability.
“It is therefore pertinent for us, as the umbrella body for manufacturers, to clarify the position of our members with respect to the subject matter involving commercial banks and the CBN. As it is the norm, commercial banks receive payments in naira either through direct remittance from their customers or credit facility for the purpose of securing FX for raw-material importation. Upon receipt of these funds or grant of credit facility, the banks then remit the Naira to the CBN on behalf of their customers. From that point, the funds are deemed to be held by the apex bank, thereby completing the customers’ obligations in
“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. Our members have played their part and the commercial banks should play their own part. 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,” the group said.
The group also called on the CBN to speed up the long overdue redemption of the unsettled forex forward, as a lasting solution to the dilemma, even as it reiterated its readiness to engage with the banks and other stakeholders to co-create the solutions that will facilitate the timely resolution of the long-drawn impasse.
According to MAN, commercial banks and manufacturers should be partners that collaborate to build shared prosperity for the nation, not adversaries.
