By Adedapo Adesanya

The Manufacturers’ Association of Nigeria (MAN) has claimed that banks were harassing its members over outstanding forward foreign exchange (FX) contracts with the Central Bank of Nigeria (CBN).

According to reports by Bloomberg, members have faced penalties, including frozen accounts over the impasse, while others are constantly being harassed.

The contracts were from the Nigeria’s previous controlled FX regime, which was liberalised in June 2023, when the CBN announced a set of reforms at the FX market.

The reforms were announced after President Bola Tinubu came to power two years ago, but the Dollar backlog has taken time to pay down, contributing to the volatility of the Naira which has lost about 70 per cent of its value against the American currency.

“Our members have reported significant unwarranted complexities and undue high-handedness by the banks,” the publication reported, citing a statement.

Nigerian companies bid for Dollars via forward contracts via these banks, who then received the US currency from the CBN in exchange for the Naira. Then when the contract ends, the process is reversed.

However, the CBN hasn’t supplied the Dollars and commercial lenders now want the companies to find the Dollars elsewhere.

This is causing strain as options to buy elsewhere will see them buy at higher rate and higher demand may weaken the value of the local currency, creating more problem for manufacturers already facing a hard time.

“We reiterate our call on the Central Bank of Nigeria to speed up the long overdue redemption of the unsettled forex forward, ” MAN said. “Our members should not be harassed.”

The CBN claimed it had settled the necessary backlogs which was around $2.4 billion, claiming that an independent audit saw a lot of unfounded and unverifiable claims.

Bloomberg added that the apex bank initially disputed the claims, but later said it would investigate and settle on merit.

This development comes as manufacturers face a series of headwinds in their operations including transport and logistics, infrastructure, particularly around major ports and industrial corridors, which make the operating environment unconducive for manufacturing.

According to the Director-General of the association, Mr Segun Ajayi-Kadir, the manufacturing sector’s growth was as low as 1.40 per cent in 2023 and declined further to 1.38 per cent in 2024.

He also these challenges are evident in the sector’s capacity utilisation and its contribution to the nation’s economy, which have hovered around 5.5 per cent and 10 per cent respectively, over the past 12 months.

By Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.13 per cent on Thursday, May 22, pushing the market capitalisation of the bourse higher by N2.38 billion to N1.849 trillion from N1.847 trillion quoted at the preceding session, with the Unlisted Security Index (NSI) jumping by 4.08 points to 3,158.24 points from the previous session’s 3,154.16 points.

The expansion was influenced by FrieslandCampina Wamco Nigeria Plc and Central Securities Clearing Systems (CSCS) Plc despite the loss posted by Food Concepts Plc.

FrieslandCampina gained N1.49 to close at N41.50 per share compared with the previous closing value of N40.01 per share and CSCS increased by 16 Kobo to to end at N24.03 per unit, in contrast to Wednesday’s closing price of N23.87 per unit.

However, Food Concepts Plc went down by 5 Kobo during the trading session to close at N1.50 per share compared with midweek’s price of N1.55 per unit.

The volume of securities bought and sold yesterday went up by 13.7 per cent to 452,466 units from the 398,093 units traded in the previous trading day, the value of shares transacted by the market participants declined by 63.7 per cent to N1.5 million from N4.1 million, and the number of deals carried out by investors went down by 10.5 per cent to 17 deals from 19 deals.

When trading activities ended for the day, Impresit Bakolori Plc remained the most active stock by volume on a year-to-date basis with the sale of 536.9 million units worth N524.7 million, followed by Geo-Fluids Plc with 267.1 million units valued at N472.3 million, and Okitipupa Plc with 153.6 million units sold for N4.9 billion.

In the same vein, Okitipupa Plc remained the most traded stock by value on a year-to-date with a turnover of 153.6 million units valued at N4.9 billion, trailed by FrieslandCampina Wamco Nigeria Plc with 21.9 million units worth N844.3 million, and Impresit Bakolori Plc with 536.9 million units sold for N524.7 million.