Manufacturers call on agric minister to rescind ban on raw material

Investors and members of the Manufacturers Association of Nigeria (MAN), agricultural sector, have called on the minister of agriculture, Audu Ogbe, to help in the reversal of CBN forex policy that included one of their most important raw materials – crude palm oil (CPO) on the ‘not valid for forex’ list.

Speaking recently, Frank Udemba Jacobs, president, MAN, said forex should be made available for genuine manufacturers that use CPO as a major raw material for production of end goods such as noodles, biscuits and cosmetics.

According to MAN president in a statement, this decision by the apex bank has threatened the existence of several manufacturing companies who 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.

In the statement, he said these companies had been involved in the agricultural sector of the nation’s economy 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.

Jacobs commended the present administration for its efforts in trying to revolutionalise local industries through this policy; however, “there are certain indices that must be taken into consideration before full implementation of such policy.”

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.

The statement quoted Index Mundi, a data portal, that the domestic palm oil produced in Nigeria totalled 930,000MT in 2014. The consumption of palm oil in Nigeria amounts to 2.0 million MT per annum. The official figures state that the shortage in oil palm industry is estimated to be around 900,000MT annually.