FG’s FX reforms, others crippling businesses, say NECA, MAN, NACCIMA

The Nigeria Employers’ Consultative Association (NECA), Manufacturers Association of Nigeria (MAN), and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) have attributed the current socio-economic crises in Nigeria to hasty government policy shifts implemented without adequate mitigation plans.

The associations expressed their concerns separately, with NECA highlighting the negative impact of major policy shifts undertaken by the government in 2023.

At the 67th Annual General Meeting of NECA in Lagos, President and Chairman of the Council, Taiwo Adeniyi, lamented that the removal of fuel subsidies and exchange rate liberalization have created market distortions, increased business costs, and led to a contraction in business activities since mid-2023.

Adeniyi stated, “Private businesses are struggling with high production costs due to increased import bills for foreign inputs and raw materials.

“The liberalization of the forex regime has significantly raised import costs for the private sector.

“We urge the Federal Government to review the current forex liberalization policy and adopt a more guided forex management procedure that supports domestic production.”

Adeniyi also raised concerns about the high cost of doing business due to the depreciation of the naira, increased Customs forex rates for clearing cargoes, and business-antagonistic regulations.

He urged the government to implement pro-business policies that drive production and job creation and called for exhaustive consultations with private sector stakeholders on policy issues.

On its part, the Manufacturers Association of Nigeria (MAN) identified foreign exchange volatility, inadequate power supply, and high inflation as significant challenges in the first quarter of 2024, leading to a surge in production and distribution costs by 20.7%.

MAN’s Director General, Segun Ajayi-Kadir, highlighted the need for the government to address forex scarcity, improve electricity supply, promote fiscal sustainability, and ensure policy consistency to improve the sector’s performance.

Contributing to the discourse, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) also expressed concerns about the rising cost of doing business.

Director General Sola Obadimu noted that high interest rates are limiting the financial capacity of MSMEs and large businesses, leading to downsizing and potential increases in unemployment and crime rates.

He emphasized the need for improved public finance management to mitigate the harsh economic environment.

In a related development, Nigeria Labour Congress (NLC) President Joe Ajaero, in his message at the NECA AGM, called for better wages for workers, arguing that fair wages would boost worker productivity and economic consumption.

Ajaero warned that organized labor would shut down the country for one month if the National Assembly and governors succeed in deregulating the minimum wage, imposing what he described as a “slave wage” on workers.

Ajaero said, “Fair wages are not just a matter of social justice; they are also instrumental in boosting worker productivity and, consequently, the bottom line for employers. Enhanced purchasing power among workers will lead to increased consumption, addressing the concerns of rising inventories in warehouses.”

He warned that if the House of Representatives and the Senate pass a law to decentralize the minimum wage, organized labor would take drastic action to prevent the imposition of poverty wages on Nigerian workers.