In a proactive move to tackle the pressing issues faced by Nigeria’s manufacturing sector, key stakeholders from the Nigerian Exchange Group (NGX) and several prominent listed companies recently engaged with the Federal Government to seek solutions to ongoing challenges.
The call for intervention was made during a visit by the Minister of Industry, Trade & Investment, Doris Uzoka-Anite, to the NGX headquarters in Lagos.
This closed-door session, also attended by select media representatives, provided an essential platform for industry players to voice concerns and propose collaborative strategies.
One of the primary concerns raised during the meeting was the recurring trend of foreign exchange losses and high finance costs that have significantly impacted manufacturers.
Umaru Kwairanga, Group Chairman of the NGX Group, emphasised the importance of government engagement with the capital market to understand these challenges thoroughly and work towards effective solutions for the benefit of listed companies .
“This is important, so that they can know the challenges and be able to proffer solutions to aid the listed companies,” Umaru said.
Temi Popoola, Group Managing Director and CEO of the NGX Group, expressed cautious optimism about the economic outlook, indicating that while challenges have been significant, collaborative efforts between NGX and the Federal Government could boost liquidity and support Small and Medium Enterprises (SMEs) .
Popoola also emphasized the need for intentional regulatory improvements to enhance the activities of the capital market, echoing sentiments shared by other participants.
The delegation representing the manufacturing sector included notable figures such as Ravindra Singhvi, CEO of Dangote Sugar Refinery, who highlighted the critical need for hedging mechanisms to mitigate foreign exchange loan risks. Singhvi stressed that the absence of such mechanisms leaves manufacturers exposed to volatile currency fluctuations, which adversely affect their operations.
“There is no hedging mechanism for us and this leaves us exposed to changes in the currency market,” Singhvi said.
Similarly, Abioye Musibau Ayodele, Managing Director of BUA Foods, emphasised the impact of foreign exchange challenges on manufacturing operations, particularly the disproportionate effect on energy costs. Ayodele advocated for aggregated power supply for manufacturing clusters, citing it as a critical area for cost optimization.
“The economy is trying to recalibrate. The FX situation impacted the manufacturing sectors negatively but it did not affect others like that. There is a need to consider aggregating power supply for manufacturing clusters like Agbara because after raw materials, the cost of energy is one of the highest costs,” Ayodele said.
Singhvi and Ayodele also stressed the necessity of policies aimed at supporting Small and Medium Enterprises (SMEs) by ensuring timely payments and providing designated quotas of supply contracts to MSMEs. Additionally, there was a call for streamlined tax policies at both national and state levels to reduce complexity and promote business growth.
“There is a need to also promote exports and work on the multiplicity of taxes. Unify the taxes, so that it is the same at the national and state levels,” Singhvi said.
Minister Doris Uzoka-Anite assured participants of the government’s commitment to understanding and addressing these concerns, emphasising the importance of collaboration between regulatory bodies, industry stakeholders, and policymakers to foster a conducive environment for economic growth and sustainable development.
Moving forward, it is expected that these discussions will lead to tangible policy interventions aimed at enhancing the competitiveness of Nigerian manufacturers, promoting SME growth, and ensuring a more conducive business environment through targeted regulatory reforms and strategic initiatives. This collaborative approach between the Federal Government and the capital market signals a positive step towards revitalising the manufacturing sector and supporting broader economic recovery efforts.
