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CBN Governor, Godwin Emefiele

MAN faults CBN’s forex ban on raw materials, woos Ogbeh to intervene

CBN Governor, Godwin Emefiele
CBN Governor, Godwin Emefiele
Manufacturers Association of Nigeria (MAN) has sought the intervention of the Minister of Agriculture, Chief Audu Ogbeh, in reversing the Central Bank of Nigeria (CBN) foreign exchange policy that included one of its members’ most important raw materials, Crude Palm Oil (CPO), on the “not valid for forex” list.
Speaking at a forum of industrialists, MAN President, Dr. Frank Udemba Jacobs, said that forex should be made available for genuine manufacturers that use CPO as a major raw material for production of end products such as noodles, biscuits and cosmetics, among others.
According to him, the decision by the apex bank has threatened the existence of several manufacturing companies, which rely heavily on CPO as a major raw material for production. “These companies have invested heavily in plants and machinery worth several billions of dollars in the country and what the CBN is indirectly telling them is that it could not be bothered with the challenges this policy is posing to our members,” he said.
He noted that the companies have been involved in the agricultural sector as part of their backward integration programme, thereby creating more jobs and strengthening Nigeria’s ability to be self-sufficient in food, beverage and cosmetic production.
Meanwhile, Jacobs has commended the present administration for its efforts in trying to revolutionalise local industries through this policy, but insisted that there are certain indices that must be taken into consideration before full implementation of such policy.
He explained that while the policy is a welcome development, there should be no sudden obstruction to importation of the raw material that is needed for local production, especially when demand for such material cannot be met locally.
According to IndexMundi, a data portal, the domestic palm oil produced in Nigeria totalled 930,000MT in 2014 but the local consumption of palm oil in Nigeria amounts to 2 million MT per annum. The official figures state that the shortage in oil palm industry is estimated to be around 900,000MT annually. This poses a precarious situation for the manufacturing sector that depends largely on CPO as a major source of raw material.
The MAN president warned that if this shortage was not filled with importation of high grade palm oil, the economy will lose further investment in the manufacturing sector as companies would be forced to shut down and relocate their businesses outside the country, like it happened in the past.

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