The Manufactures Association of Nigeria (MAN) has stressed the need for ardent enforcement by the Central Bank of Nigeria (CBN) to ensure that the Private Finance Initiatives (PFIs) and Deposit Money Banks (DMBs) grant transparent and effective access of its intervention funds to manufacturers.
According to MAN, this is especially with respect to the N1 trillion manufacturing and import substitution facility, the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMED), the 100 billion Health Care and Pharmaceuticals Support Funds and N300 billion Real Sector Support Facility (RSSF).
MAN however, commended the various CBN funding windows, but said poor implementation hinders the attainment of the noble objectives of these funds, adding that manufacturers hardly access these funds.
In the comment of MAN on CBN intervention funds for manufacturers and Naira 4 Dollar Scheme, its Director General, Segun Ajayi-Kadir said, no doubt, development funds are critical to driving manufacturing investment and by extension, production.
He said, this is because the single digit interest rate for developments fund far contrasts the more than 25 per cent rate charged on commercial banks’ lending.
“Specific guidelines and timelines for the effective and complete disbursement of the intervention funds. There should also be periodic report of the status of implementation to the CBN to ensure progressive monitoring. In addition, PFIs and DMBs who fail to diligently and timeously disburse all the funds allocated should be sanctioned.
“As the umbrella organization of manufacturers in Nigeria, MAN hereby indicates its interest and solicits CBN’s consideration to be part of the monitoring process.
On the CBN Naira 4 Dollar Scheme, he said, the scheme is yet another intervention of the apex bank that is set against the backdrop of the forex squeeze that was aggravated by the fall in oil prices and the COVID-19 Pandemic since the first quarter of 2020.
“The CBN, probably in a bid to avoid the full blown devaluation of the Naira, has made several policy statements and issued several circulars, albeit with some flip-flops, in the management of the country’s foreign exchange.
“The CBN had implemented measures that focused on addressing the downturn in dollar inflow by constraining forex demand, including the list of some items not valid for forex which we indicated negatively impacted some of our sectors.
“This latest measure suggests that the CBN is taking a closer look at forex supply, incentivizing it through diaspora dollar remittances to ramp up supply and help stabilize the forex situation of the country. I believe that the CBN will work with the IMTOs and the deposit money banks to deal with the remittance infrastructure challenges, as well as the cost.
“In the face of it, the scheme should encourage Nigerians working abroad to remit more into Nigeria and thereby improve the forex inflow. However, we need to dimension the inflows which has historically been 70per cent for family support and 30per cent for other purposes, including real estate which carries the greater part. In order to yield more of the anticipated inflow for investment in productive activities, the CBN would have to work with the Banks and other relevant government agencies to initiate portfolios and measures to point the remitters in that direction,” he said.
Speaking further, he said there is also the need to consider where the domestic foreign exchange earners stand within the context of this scheme.
He said, “For instance, could a manufacturer who exports his product and repatriates his dollar profit, get his money in dollars and also benefit from the Dollar 4 Naira Scheme? This way, you can guarantee almost a 100per cent re-investment in production and reap all the attendant benefits and even partly make-up for the losses incurred as a result of the poor implementation of the EEG. The average manufacturer who is confronted with a lot of infrastructure and macroeconomic challenges is eminently qualified, if not more qualified, to benefit from such a scheme.
“Generally, MAN observed through feedbacks from members and interaction with the CBN on several occasions that these facilities and funds have not been adequately accessible to manufacturers due mainly to the prevarication of the PFIs and MDBs.
“MAN, while acknowledging the excellent initiative of the CBN in setting up the N1 trillion COVID-19 stimulus facility for manufacturing and import substitution, observed that most of its members who applied were not able to get it,”MAN DG said.
According to the CBN, only 76 companies have received N300 billion, which translates to 30per cent, in one year. Intriguingly.
