‘Manufacturers lost N1.5trn to delayed business activities in 6 months’
The Central Bank of Nigeria (CBN)’s foreign exchange restrictions have caused Nigerian manufacturers a total loss of N1.46 trillion in stalled business activities in the last six months, the Lagos Chamber of Commerce and Industry (LCCI) has said.
In a 2015 economic review, the chamber said its third quarter 2015(Q3-2015) survey showed that the CBN’s forex restriction was one of the costliest policies in Nigeria in recent years.
“Private operators across several sectors (Fast Moving Consumer Goods (FMCGs), steel, furniture, pharmaceuticals and manufacturing) lost about N1.46 trillion in stalled business activities resulting from paucity of forex over the last six months,” Muda Yusuf, director-general of the chamber, said in a statement.
Yusuf said available data showed that Nigeria Customs Service’s revenue contracted in 2015 relative to 2014 owing to the phenomenon, adding thatin 2015, unfriendly business environment undermined the capacity of investors to maximise abundant business opportunities in Nigeria.
He said the deplorable state of roads leading to Apapa and Tincan Island ports in Lagos was a big clog in the wheel of business progress in 2015, stating that intense reparation should be done on them, given that they accounted for over 60 percent of the cargo into the country and an estimated 70 percent of customs revenue.
The LCCI DG enumerated some of the effects of the roads on the private sector to include risk to the lives of citizens arising from containers falling off the trucks as a result of bad roads; congestion at the ports resulting from the delay in the evacuation of cargo, as well as high demurrage paid by importers to terminal operators and shipping companies as a result of delays [which were not their own making] in the clearance and evacuation of cargo in the ports.
He further said the state of the roads had resulted in high cost of transportation for evacuating cargo because of the prolonged engagement of the trucks by importers, as well as delays in getting raw materials and other inputs from the ports to factory premises in Lagos and other parts of the country
“We urge the Federal Government to fix these roads as a matter of utmost urgency, as these are federal roads. It is also important that the trailer park under construction in the neighbourhood of the Tincan Island port be urgently completed to reduce the menace of trucks and tankers on Lagos roads. Above all reforms of the downstream petroleum sector should be accelerated to reduce the importation of petroleum products and by extension the pressure on Lagos ports,” he said.
He stressed that sectors such as manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015.
“The successful democratic transition that ushered in a new political administration presented a new wave of optimism on the back of the inherent goodwill of the administration at the federal level. However, business activities were largely slow for a better part of the year due to uncertainties around the general economic policy direction of the present administration,” he said.