Nigeria govt palliative not enough – MAN

CBN Governor, Godwin Emefiele has cut lending rate to 12.5%
CBN Governor, Godwin Emefiele
Everything on JUMIA

The acting Director General of the Manufacturers Association of Nigeria (MAN), Ambrose Oruche, says the Nigerian government palliative measures are not enough in the face of coronavirus spread.

Mr Oruche says it is “unquantifiable” if you take into account the short and long term effects of the coronavirus outbreak.

“The impact is not going to be immediate, but that is a signal that there is so much challenge because these are the trading partners we have for raw materials and also for our finished products, especially China and Europe.

“So, if that happens, even as at today, most of the stock of raw materials of our members are almost finished, and stocking of tools for maintenance is yet another problem. Raw material is a major challenge now, even some of our members have asked their staff to start working from home.

Deal of the day

“You know what that means, especially essential ones, so sustaining manufacturing has become a major challenge. If this thing lingers on, it will remain a very difficult challenge for us, but we are about giving a letter to government on our position to give stimulus to industries, like America is giving cash to their citizen at home to enable them purchase what they want to purchase, despite the fact that they are not going to work, because of the complete lockdown caused by Covid-19.

“The money that the Central Bank of Nigeria (CBN) has just released is for people that have CBN loan, what of people that have commercial bank loan that will not do business for this period? What happens to them, there loan will still be running and even when they didn’t come back to business this year, they will still be meant to pay or the Commercial Banks will take over their collaterals.

“So it is a complicated issue that the government need to step in, I don’t think Nigerian government realises the magnitude of what we are facing.

“They don’t know the magnitude; they are only concerned with the oil price. Oil price is dropping below $30, it’s also a challenge, because where is the fund to import?

“Where is the foreign exchange to import raw materials? It’s a clarion call to everyone to begin to look inwards for raw materials, because what this is trying to show is that; “we should not depend on external sources for our business to model.

“Think about how you can make this thing work internally, so that of the virus is external challenge, but we are talking of how we can still run our business. So I think that’s a lesson to local industries and local manufacturers.

“Be that as it may, how do we sustain industries for this period, so government should come up with a clear court policy to support, incentives to support manufacturers to weather this storm.

“It’s a heavy storm that had fallen upon global economy, we have to look at how other people are weathering it, how China is getting over it, how U.S, Europe are getting over it and I am not saying we have that kind of billions of Pounds and Dollars.

“We should know that US released $1 trillion, which is more than our GDP put together, but government should be able to think of something immediate. Though President Buhari has setup a committee to look at it, but it should be something that can come up with immediate response.

“How do we help the industry and how do we help businesses? Forget about CBN’s 5% palliative measure. How many people are holders of that form that is for N50 billion CBN? How will they fix the families that are affected, people that their work will stop as a result of that? So it’s a big challenge. I know of companies that ask their workers to go because they can’t source raw materials from abroad. It’s a serious issue and we must face it and manage this situation.”

He urged the government to declare a state of emergency in the manufacturing and textile sector. “MAN can collect money and trade but if you don’t have raw materials, you can’t produce, if your machine stops, you can’t get technical experts from abroad to fix it because of the challenge, so it’s an overwhelming thing.

“However, this situation is also a clarion call for manufacturers to begin to look inwards in order to source local materials. It is a call to the country to revive the Ajaokuta steel industry and the Nigerian machine tools would have been a veritable alternative for equipment fabrication but where are they?

“The entire manufacturing sector has been adversely affected, it has totally affected everyone. Some companies have placed their cars on traveling ban, you can’t even move within Nigeria, not to think of going abroad, if there is a movement restriction, what business can you do? So it’s a big challenge.”