|The manufacturing industry requires the injection of about $1bn to galvanize activities in the sector and enable it to contribute significantly to the economy, the Manufacturers Association of Nigeria has said.
The President, MAN, Dr. Frank Jacobs, who said this on Thursday, however, commended the Central Bank of Nigeria for its recent interventions in the forex market targeting critical sectors.
In October, the apex bank released $314m for forward payment to clear a backlog of forex requests by operators in the manufacturing, agriculture and aviation sectors.
The central bank also settled $270.6m in notional value of the matured October 26, 2016 futures instrument.
In line with the trend since the introduction of the Over the Counter forex futures, the central bank issued a new 12-month tenor instrument (October 25, 2017) worth $1bn at N258.50/US$1.00 to replace the maturing instrument.
The apex bank in a release had stated that it was intervening in the forex market through the Special Secondary Market sales.
It stated, “In order to further engender market confidence, ensure access to FX by end users and sustain the integrity of the Nigerian inter-bank FX market, the CBN has resolved to intervene in the inter-bank FX market through forward settlement.
“This is an important one-off exercise dedicated to the clearance of the backlog of matured FX obligations for: raw materials and machineries for manufacturing companies; agricultural chemicals; and airlines.”
In November, the apex bank injected another $500m into the market specifically for the manufacturing sector.
Jacobs said, “I am happy that they are becoming more sensitive to our needs. The $500m will help but not in a very significant way. It is going to take a lot to satisfy the forex demand of the manufacturing sector. If $1bn is allocated to the sector, it will make a significant difference, especially now that the operators are looking inwards for raw materials.”