LCCI raises alarm over dwindling fortunes of foods, rubber industries

The Lagos Chamber of Commerce and Industry (LCCI) has raised the alarm over the falling fortunes of food, household, tyre/rubber and pharmaceuticals industries, owing to difficulties they encounter in the foreign exchange market.

The Central Bank of Nigeria (CBN) recently restricted 41 items from the foreign exchange market. The apex bank also took other restrictive measures which the business community considers extreme. The apex bank has, however, made it clear, on numerous occasions, that the steps were meant to save the naira and the falling external reserves while also encouraging local production of key products.

But the LCCI, in its ‘Impact Assessment Report on the CBN Foreign Exchange,’ said foods and household makers encounter delays in the processing of Form ‘M’ to import and meet demands, a situation that has led to loss of market share.

According to the chamber, companies in the Fast Moving Consumer Goods (FMCG) sector have been unable to settle outstanding obligations to foreign suppliers, adding that this has slowed down their ability to get fresh supplies for production.

“Palm oil, for instance, is needed for production of some consumer goods, and since local supply cannot meet industrial usage, the inability to import it has caused some difficulties for manufacturers in such sectors. Prices have to increase at least marginally.  There is a supply gap of about 600,000 metric tonnes annually in Nigeria,” LCCI said.

For the pharmaceutical industry, the chamber said some raw and packaging materials that are required in manufacturing process are on the exclusive list, but are not available locally and therefore have to be imported.

“There are issues with the classification of the items on the list. The glass bottles have been classified as glassware and as such cannot access forex market to import them. Local bottlers do not produce the small sizes as local requirements are not large enough to attract them into producing small glass sizes,” the chamber disclosed.

“There is scarcity of pharmaceuticals package materials such as glass and plastic bottles. Industry operators have almost run out of key packaging input with implications of shut-down and job losses in near term,” LCCI said.

At the third quarter press conference and economic review, Remi Bello, president, LCCI, urged President Muammadu Buhari to intervene to prevent further damage to the private sector and the economy.

Bello said some of the challenges facing the country emanate from poor productivity.

“This is why we urge the government to accelerate investment in infrastructure and build quality institutions for better productivity and competitiveness in the economy,” said the LCCI president.

ODINAKA ANUDU