Manufacturers Lament Massive Loss Due to Naira Depreciation and Forex Scarcity

The Chairman of the Ogun State chapter of the Manufacturers Association of Nigeria (MAN), George Onafowokan, has expressed deep concern over the ongoing crisis in Nigeria’s manufacturing sector, attributing significant losses to the government’s decision to float the naira in 2023.

Speaking at the 39th Annual General Meeting of MAN in Ogun State, held under the theme, “Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability,” Onafowokan revealed that 16 major manufacturers have faced combined losses of N792 billion. He attributed this setback to the steep depreciation of the naira, which saw the exchange rate surge to NGN1,900 to $1 by early 2024.

“This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports,” Onafowokan stated.

He explained that the shortage of foreign exchange at official rates has forced many manufacturers to rely on the parallel market, where rates have hit NGN900 to $1, driving up production costs for firms dependent on imported raw materials and machinery.

The currency depreciation has inflated costs and forced some manufacturers to halt or suspend their operations. He emphasised that the cumulative forex losses in 2023 have ripple effects extending into 2024, affecting large firms and small and medium enterprises (SMEs).

In addition to currency issues, Onafowokan pointed to the mounting challenges of inadequate infrastructure and rising energy costs. He highlighted poor road conditions in Ogun State as a primary concern, noting that crucial transport routes remain in disrepair, leading to frequent accidents and heightened logistics expenses for manufacturers.

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