The Manufacturers Association of Nigeria, MAN, has urged the Central Bank of Nigeria, CBN, to save its members from being harassed by commercial banks in the country over forex backlog.
The umbrella body of manufacturers in the country said the CBN must quickly resolve the issue to avert severe consequences for the country as manufacturers are being denied forex for production and importation essential machinery.
According to MAN, in a statement issued by Segun Ajayi-Kadir, its Director General commercial banks are harassing members over unmet foreign exchange forward obligations, saying this is not their faults, adding that the CBN should clear the backlog before it degenerate into serious problems for the country.
Ajayo-Kadir said once its members have forwarded the naira equivalent of their required forex to commercial banks, whatever happens from there should not be blamed on them.
To now freeze the bank accounts of its members because of uncleared forex backlog, is wrong, saying it’s the CBN responsibility to intervene and ensure that such forwards are cleared, adding that the “complexities and undue highhandedness” by the banks towards its members is unwarranted. .
The MAN DG cited an example of a worrisome case of a forex forward related dispute involving KAM Industries Nigeria Limited, a leading manufacturer in the steel sector in West Africa and one of the commercial banks in Nigeria.
“This should stop in the interest of economic development of Nigeria, job security and business sustainability,” he said.
“As it is the 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.
“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.”
Given this background, MAN asserted 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,” he said. “Our members should not be harassed by the banks.
He urged commercial banks to show understanding and be supportive as stakeholders collectively 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.
“We call on the Central Bank 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 Central Bank of Nigeria to speed up the long overdue redemption of the unsettled forex forward, as a lasting solution to the dilemma,” he said.
The Yemi Cardoso-led CBN claimed it has cleared forex backlog to the tune of $7 billion.
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