Nigeria’s crippling Forex manufacturing shortage

Members of the Organized Private Sector (OPS) and other stakeholders in the national economy urged the federal government, through the Central Bank of Nigeria (CBN), to take action on the challenges faced by manufacturers to access currencies.

They also begged the government to sponsor local software developers instead of importing solutions or software from China and other countries.

PAHO, comprising the Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce, Industry (LCCI) and others, in various interviews with LEADERSHIP on Sunday, said the government needs to improve the access to foreign currency for the importation of machinery and raw materials in order to boost local production and support the fragile growth of the country.

President of MAN, Ing. Mansur Ahmed, said manufacturers are struggling to stock up on foreign currency for importing machinery and raw materials that are not available in the country.

“We request the intervention of the President to ensure the prioritization of the allocation for the purpose of importing raw materials and vital machinery and equipment that are not locally available.”

He said manufacturers are still grappling with an inadequate electricity supply from the national grid and high electricity tariffs from distribution companies, coupled with the massive cost of providing alternative energy at more than $ 72.7 billion. naira, thereby limiting the competitiveness of manufacturing in Nigeria.

Ahmed noted that the limited access to long-term loans and the high cost of loanable funds also jointly restrict the sector’s ability to produce at full capacity and negatively affect the contribution of manufacturing to gross domestic product (GDP).

Setting an agenda for policymakers and economic managers for 2022, Center for the Promotion of Private Enterprise (CPPE) CEO and outgoing LCCI CEO Dr Muda Yusuf said the macroeconomic situation is one element very important to the business environment as it has a considerable impact on investor confidence, adding that it has implications on costs, profits, competitiveness and sustainability of investments.

He called on the government to tackle four key macroeconomic variables: inflation, the exchange rate, GDP growth and the trade balance.

Inflationary pressure remains a major concern for both businesses and households, according to Yusuf, as it remains high.

According to him, “in order to fight inflation, we must tackle the main drivers of inflation in 2022: increasing the productivity of the economy to stimulate output growth; stem the depreciation of the exchange rate of the naira; fight against illiquidity in the foreign exchange market and fight against insecurity, among others.

He added that for the economy to support GDP growth, it is important to create an environment conducive to positive investor sentiments in the economy, which should be guided by policy, regulation, macroeconomic conditions and security. of life and property.

Meanwhile, in an exclusive interview with LEADERSHIP on Sunday, the President of the Institute of Software Practitioners of Nigeria (ISPON), Mr. Chinenye Mba-Uzoukwu, said that over the years the Nigerian government had failed not been able to fully deploy local solutions to local problems, with the country depending on foreign countries for solutions.

Mba-Uzoukwu revealed that Nigeria as a country is blessed with excellent software developers who have come up with several solutions to local problems, but the government sometimes does not hang out with them because they prefer to import solutions or software. from China and other countries. .

This implies, according to the president of ISPON, that if this trend continues, the country will experience a brain drain in the ICT sector, as a majority of young innovators now go to other countries where their talents will be much greater. appreciated.

To change the narrative, Mba-Uzoukwu said, the Nigerian government and the private sector should start sponsoring local software developed by Nigerians. This, he stressed, will not only help retain the nation’s talents in the country, but also increase its foreign exchange reserves.

“We cannot depend on America or Germany to always come and solve our local problems for us. The government needs to look inward, work with our local software developers to solve some of the problems in the ICT sector and in Nigeria in general, ”said Mba-Uzuokwu.

For his part, cybersecurity expert Hakeem Ajijola said Nigeria’s ICT sector is one of the largest in Africa.

To maintain this position and even do much better this year and beyond, Ajijola said the government must continue to develop literacy, although he urged the government to embark on continuous capacity building and provide an environment conducive to the prosperity of SMEs, by signing the start- the bill into law.

Another area the government should be looking at is overregulation and “too much control of the ICT sector,” Ajijola says.

“We saw it in the ban on Twitter which resulted in huge losses for the Nigerian economy. Certainly there is a need for rules, regulations and enforcement, but it has to be smart rules, smart enforcement, ”he added.

Ajijola also called on the government and its agencies to focus more on broadening and deepening the ICT sector and not just on Internal Revenue Generation (IGR), adding that IGR is not the only one way to measure success.

For Professor Akpan Ekpo, former Director General of the West African Institute for Financial and Economic Management (WAIFEM) and President of the Foundation for Economic Research and Training, it is urgent that the government in 2022 implement in a manner aggressive national development plan.

According to him, this would lead to an increase in the influx of foreign investors into the country as well as the development of the local economy and the overall growth and development of the country.

“In 2022, we should start aggressively implementing the National Development Plan 2021-2025 (PND), and in this context, we should start repairing the power supply so that micro, small and medium enterprises ( MSME) can develop well and create jobs.

“In addition, the insecurity in the country is becoming unbearable because it scares investors away. When we say that the GDP is increasing, it is jobless growth. So the government needs to fix the power and the security and all of these things are in the NDP, and they are expected to implement it in the first two quarters of 2022.

“If they do, they can win back the trust of Nigerians and investors who want to come to the county, build factories and employ people. Right now, people have lost faith in government, but if they can do these two things and people can move around easily and do their business easily, they will regain the lost trust, ”he said. underline.

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