The Manufacturers Association of Nigeria is happy with the Central Bank of Nigeria for sustaining its weekly forex intervention in the market which has positive impact on prices of good

By Anayo Ezugwu

THE Manufacturers Association of Nigeria, MAN, has applauded the Central bank of Nigeria, CBN, for maintaining stable foreign exchange rate. MAN said the ability of the apex bank to sustain intervention in the real sector has positively impacted the prices of locally produced goods.

Mansur Ahmed, president, MAN, said weekly intervention in the foreign exchange market as well as access to forex for raw materials importation aided the stability of consumer goods’ prices, and tamed inflation. Indeed, the consumer price index, CPI, which measures inflation increased by 11.44 percent (year-on-year) in December 2018, or 0.16 percent higher than the rate recorded in November 2018 at 11.28 percent. Similarly, increases were recorded in all COICOP divisions that yielded the Headline index, especially in the prices of domestic services.

While addressing journalists in Lagos, on Wednesday, January 30, Ahmed said the decision of CBN to keep the Monetary Policy Rate, MPR, for a longer period is to check rising inflation, and to prevent a situation where illiquidity leads to fluctuating forex rate.

He said: “We shall be giving greater attention to measures that will substantially improve the contribution of the manufacturing sector to the Gross Domestic Product, GDP, from the current paltry 9.5 percent.

“We hope to appreciably increase the capacity utilisation of member-companies by promoting policy consistency in a manner that the gains already made are not pulled back while ensuring the revival of sectors that are currently struggling,” he said.

Ahmed emphasised the need to promote a more inclusive economy among all categories of companies in the membership of MAN through the establishment of structured and mutually beneficial linkages between the large corporation groups, and small and medium industries. He also targets to expand the scope of strategic partnership with relevant organisations within Nigeria, West Africa, Africa, and outside the rest of the world.

On the ratification of the African Continental Free Trade Agreement, AFCFTA, he noted that MAN’s report on the agreement will be submitted to President Muhammadu Buhari this February.  “MAN being a proactive organisation that strongly believes in evidence-based advocacy, commissioned a sector-specific study on AfCFTA. We have shared the study, full report and fact sheets on the highlights of findings with the Presidential Committee on AfCFTA.

“We are confident that the eventual position of Nigeria on the AfCFTA Framework Agreement would be well-articulated in a fresh National Negotiation Mandate. This is in the best interest of the manufacturing sector and indeed the Nigerian economy, while paying utmost attention to emerging issues on AfCFTA and ensures that the industrial aspiration of the country is not compromised on the platter of free trade.”

The stable foreign exchange regime has also increased the foreign exchange inflow of CBN. The third quarter economic report of the CBN showed that between January and September 2018, a total foreign exchange inflow of $40.93billion was recorded by the bank.

The inflow of $40.93 billion, when compared with the $27.95 billion recorded in the first nine months of 2017, represents an increase of $12.98 billion. Analysis of the report indicated that about $14.15 billion passed through the apex bank in the first quarter of last year.

In the second quarter, the CBN recorded foreign exchange inflow of $13.82 billion, while the sum of $12.95 billion was recorded during the third quarter of 2018. The report stated that despite the decline in domestic crude oil production, there was an improvement in foreign exchange revenue from oil export in the third quarter of 2018.

In terms of outflow, the report showed that $9.65 billion left the apex bank in the first quarter. The figure rose by $3.64 billion to $13.29 billion in the second quarter, before reaching $16.93 billion during the third quarter of last year.

The apex bank attributed the increase in outflow relative to the preceding quarter to a 32.2 percent and 28 percent increase in public sector payments and interventions in the foreign exchange market. Overall, a net outflow of $3.98 billion was recorded through the bank in the third quarter, compared with $530 million and $2.64 billion in the second quarter of 2018 and the corresponding period of 2017.

– Feb. 1, 2019 @ 15:55 GMT |