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How Inadequate Forex, Others Are Affecting Operations Of Brands Owners In Nigeria

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From rising cost of goods and services to the rising inflation, the Nigerian economy is in a state of uncertainty. The cost of products is extremely high from bread, and soft drinks to food items. Manufacturers and marketers blame the rise on the increased cost of production of forex and other factors.

The new realities have forced some brands to increase the price, reduce quantity or quality, rebranding including the introduction of a new product variant that is affordable for some consumers.

Experts have identified inconsistent and unfavourable government policies, multiple taxations, poor access to cheaper funding and forex, poor infrastructure, as well as insecurity among others as some of the challenges facing the sector.

The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture said the insecurity crisis in the country has significantly affected farming activities and drastically reduced the ability to locally produce raw materials for manufacturing purposes.

Noteworthy, the real growth rate of the industrial sector from 2016-2020 average -of 1%, while the real contributed was 22% for the same period. Similarly, the real growth of the manufacturing sector averaged -1% for the same period, and real contributed was an average of 9% for the period according to information from the National Bureau of Statistics GDP report. The trend underpins the poor state of the industrial sector in Nigeria as the growth fell far below the world average of 3.60% in 2020.

Speaking on how brands are faring amid the challenges, Adetutu Oriewo, Human Resources, Commercial Category Brand, Africa for PZ Cussons during a chat with a news platform disclosed “Our challenges are not different from what other manufacturers of consumer goods have experienced in terms of cost, currency, forex, and economic situation. What we do is to be proactive and plan ahead.

“It is not about our product, it is about the consumer, it is about what our consumer wants and needs. If the consumer says I need a bottle, can you do XYZ to make my dishwashing better?”

Similarly, the Managing Director/Chief Executive Officer of Carz4Elite, Fure Ukueku lamented the inability to easily source forex for the auto business. This, he said, was affecting the industry.

He said: “We are here today to announce a surprise package for our clients in this Ember months with our partner, Fina Trust Micro Finance Bank. We understand that some of our clients would like to buy cars in this period for Christmas but because of the economic situation of the country, it is difficult for them to pay at once for their choice of cars, so Carz4Eiite and its partner decided that if a client wants to buy a car and he or she is able to deposit 30 percent with the Fina Trust Micro Finance, the bank will finance the 70 percent, and the client will start off-setting the balance in installment.”

Meanwhile, proffering solutions to some of the challenges, the newly elected Chairman of the Manufacturers Association of Nigeria (MAN) for Anambra/Enugu/Ebonyi Branch, Lady Ada Chukwudozie called for strategic partnership with government and other economic actors, as well as stakeholders, nationally and internationally, as a way the manufacturing sector could improve and overcome present economic challenges in the country.

In another vein, MAN called on the Central Bank of Nigeria (CBN) to prioritize the allocation of forex to the nation’s manufacturing sector.

It also urged the government and stakeholders to upscale electricity generation to 10000MW, Investment in ports infrastructure, and publish the list of approved harmonized taxes and levies for the manufacturing sector by the Joint Tax Board (JTB) to address the issues of multiples taxes and levies.

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