The Manufacturers Association of Nigeria (MAN) has expressed deep concerns regarding the unwholesome treatment of its members by some commercial banks in Nigeria regarding unmet foreign exchange (Forex) forward obligations.
MAN alleged that banks are handling the matter to the extreme detriment of manufacturing industries.
The Director General of MAN, Mr. Segun Ajayi-Kadir, said in a public statement that “recently, our members have reported significant unwarranted complexities and undue highhandedness by the banks.
“Many have faced stringent requirements that are not aligned with the Central Bank of Nigeria’s (CBN) guidelines, resulting in unnecessary bottlenecks and illegal freezing of their corporate and personal bank accounts, with negative impact on production, which could threaten the sustainability of manufacturing operations.
“A worrisome case in point is the ongoing forex forward related dispute involving KAM Industries Nigeria Limited, a leading manufacturer in the steel sector in West Africa and a member of the Association, and one of the commercial banks in Nigeria.
“This rather unfortunate treatment of private business is only the reported one, and there are several others undergoing similar harrowing experiences. This should stop in the interest of economic development of Nigeria, job security and business sustainability.”
Ajayi-Kadri clarified that as a norm, commercial banks receive payments in Naira either through direct remittance from their customers or credit facility for the purpose of securing FX for raw-material importation.
He said: “Upon receipt of these funds or grant of credit facility, the banks then remit the Naira to the central bank on behalf of their customers.
“And from that point, the funds are deemed to be held by the apex bank, thereby completing the customers’ obligations.”
He, therefore, asserted that members of MAN are not liable for delays or complications arising after the remittance of funds to the CBN by commercial banks.
“Our members have played their part and the commercial banks should play their own part. Our members should not be harassed by the banks.
“The banks should show understanding and be supportive as we all seek a solution to this rather unfortunate and unexpected impasse.
“As the innocent one and quite evidently the weakest and most vulnerable in the tripod, it is unconscionable that manufacturers are bearing the brunt,” he said.
Ajayi-Kadir, therefore, called on the CBN to direct the concerned commercial banks to immediately unfreeze the accounts of innocent manufacturers in relation to the vexed issue of forex forwards.
“We reiterate our call on the CBN to speed up the long overdue redemption of the unsettled forex forward, as a lasting solution to the dilemma.
“We reiterate the readiness of MAN to engage with the banks and other stakeholders to co-create the solutions that will facilitate the timely resolution of the long-drawn impasse. Commercial banks and manufacturers should be partners that collaborate to build shared prosperity for the nation, not adversaries.
“We remain open to foster dialogue between the commercial banks and affected members of the Association. This is with a view to ending the forex forward imbroglio which has brought untold hardship on manufacturers and could potentially trigger a slide towards de-industrialization of the country,” MAN said.
