The Manufacturers Association of Nigeria (MAN) has said that not all manufacturing companies have been paid for their unpaid foreign exchange forward contracts, warning that unresolved backlogs are inflicting losses too severe for manufacturers to absorb.
MAN’s position comes despite the Central Bank of Nigeria’s (CBN) declaration that it had concluded the settlement of all valid foreign exchange forward obligations.
In an interview with The PUNCH, the Director-General of MAN, Segun Ajayi-Kadir, confirmed that some manufacturers with legitimate claims were excluded from the apex bank’s final settlement and have continued to suffer heavy financial losses as a result.
Ajayi-Kadir argued that manufacturers are the least able to shoulder the burden arising from the unsettled forex forwards, stressing that the situation threatens the stability of the sector.
“Industry-wise, we have the least capacity to cope with the damage that will be done. So why are we the ones who are carrying the can? That’s the point. So many people have lost billions of naira,” he said.
“And the banks can absorb it; the CBN can absorb it, but we cannot. And we are the least responsible for what has happened,” he added.
According to him, MAN is engaging the CBN and the Federal Government to revisit outstanding cases involving manufacturers whose forex forward contracts remain unpaid.
“The CBN indicated that the exercise was concluded. But we know that some of our member companies are deserving of having their settlement. We are continuing our conversation by appealing to the CBN to revisit the issue,” Ajayi-Kadir said.
The CBN had announced on March 20, 2024, that it successfully settled all outstanding and valid foreign exchange forward obligations, fulfilling a pledge by its governor, Olayemi Cardoso, to clear about $7 billion in inherited forex backlogs. The apex bank said Deloitte Consulting audited the claims and that about $2.4 billion worth of transactions were considered unverified or invalid and excluded from settlement.
However, MAN maintained that some manufacturers affected by the exclusions fully complied with the guidelines in force at the time the contracts were executed.
“Their case is deserving of a review to allow them to get paid,” Ajayi-Kadir said. “They have produced, they have sold, they have accounts audited, and they have taxes paid. And they continue to pay interest on the foreign and local loans that they took in respect of that transaction.”
He questioned why firms that acted within existing regulations were now being penalised, insisting that the transactions were legal and properly documented.
MAN’s Director-General acknowledged that some manufacturers had received payments but stressed that the association’s concern lies with those still unpaid.
“It’s those manufacturers that didn’t get their money that we worry about,” he said.
He also confirmed that some affected firms have taken legal action, a move he warned could damage Nigeria’s image. “Many people are choosing to settle it in court. We are hoping that we don’t have to get to that, because it can affect the image of the government,” he noted.
Ajayi-Kadir reaffirmed that MAN would continue to press the government to reconsider the excluded cases. “Everything that was done was legal and straight, and there is no evidence that anybody cheated. We will continue to engage the government with the belief that they will reconsider,” he said.
MAN has previously warned that the unresolved $2.4 billion forex forward backlog could plunge the manufacturing sector into crisis, noting that many firms borrowed heavily to open letters of credit based on CBN allocations and are now grappling with high interest costs and mounting losses.
