WorldStage Newsonline– The Manufacturers Association of Nigeria (MAN) has lamented what it called unfair treatment of manufacturers by some commercial banks over unmet foreign exchange forward obligations.
Director-General, MAN, Mr Segun Ajayi-Kadir in Lagos, in a statement, urged the Central Bank of Nigeria (CBN) on speedy and lasting solutions to the issue.
He said that as a vital sector of the economy, manufacturers relied heavily on access to foreign exchange for the importation of essential raw materials, machinery, and equipment not locally available.
Ajayi-Kadir noted that recent developments showed a troubling trend in the way banks were handling the matter.
He stated that the current situation was highly detrimental to industries, which, he added, were unfortunately bearing the brunt of a problem they did not create.
“Recently, our members have reported significant unwarranted complexities and undue highhandedness by the banks.
“Many have faced stringent requirements not aligned with CBN’s guidelines, resulting in unnecessary bottlenecks and illegal freezing of their corporate and personal bank accounts.
“This has negative impact on production, which could threaten the sustainability of manufacturing operations,” he said.
The MAN DG cited the ongoing dispute involving KAM Industries Nigeria Ltd., a leading manufacturer in the steel sector in West Africa and one of the commercial banks in Nigeria.
He said this rather unfortunate treatment of private business was only the reported one, and there were several others undergoing similar harrowing experiences.
Ajayi-Kadir, addressing the dispute, clarified that the norm was for commercial banks to receive payments in Naira either through direct remittance from customers or credit facility to secure foreign exchange for raw-material importation.
He said upon receipt of these funds or grant of credit facility, the banks then remits the Naira to CBN on behalf of their customers.
“At that point, the funds are deemed to be held by the apex bank, thereby completing the customers’ obligations.
“Given this background, MAN asserts that its members 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 and manufacturers should not be harassed by banks,” he said.
Ajayi-Kadir called on CBN to direct the concerned commercial banks to immediately unfreeze the accounts of innocent manufacturers in relation to the vexed issue of foreign exchange forwards.
He urged the apex bank to speed up the long overdue redemption of unsettled foreign exchange forward, as a lasting solution to the dilemma.
The MAN DG reiterated the association’s readiness to engage with banks and other stakeholders to co-create the solutions that would facilitate the timely resolution of the long-drawn impasse.
