Business

Manufacturers Express Fear Of Closure Over Worsening Naira Value

Published

2 years ago

September 25, 2023

Operators in the Nigerian economy have expressed fear that there might be further rise in cost of goods and services, and more shutdowns of their operations over the worsening naira value.

They called for urgent intervention in the sector to prevent more hardship on Nigerians.

The National Vice Chairman of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said higher prices would be the unavoidable consequence of the current exchange rate.

He expressed dismay that the floating of the naira which was supposed to curb speculation of currency speculation, had consequently escalated the activities of speculators.

According to Kuti-George, unless the government moves swiftly to stem the tide of the naira depreciation especially at the parallel market where more customers access the FX, more factories would be forced to shut down.

He said, “It is ironic that what works in other places don’t work in Nigeria. The cost of production is rising, because we still import a large part of our input, especially equipment. Most of the raw materials that we use are imported.

“So, when the cost of input goes up, the cost of production also goes up. This will happen to the price of products. The question now is – will people be able to afford our products now? Will imported products not be cheaper than our own to the extent that people will be rejecting our products for imported ones? Unless the tide is stemmed, there will be more factories closure.”

Inflation

The President of the Manufacturers Association of Nigeria, Francis Meshioye, said the current exchange rate would inevitably lead to a hike in the prices of products given the toll it would take on manufacturers to access foreign exchange.

According to him, the floating of the exchange rate will not mean anything to operators if the naira continues the free.

Meshioye said, “It is an unpleasant development because that is the major currency through which we purchase our goods outside the bounds of our nation. It means that the cost of raw materials will continue to skyrocket.

“It is unpleasant. We hope that the government will do something about it. While we float the exchange rate, it should not be allowed to be somersaulting and skyrocketing to unreasonable levels which will not augur well for the country, knowing full well that we are not just trading amongst ourselves.”

He added that, “We have to trade outside of our bounds. The implication of this is that our prices may be unreasonably higher than prices of other countries. That implies, among other things, that our products may be found to be too expensive. If you want to look at the unavailability of disposable income among the citizenry, the choice of buying Nigerian-made products, which may be expensive and foreign products which are cheaper is low. It is pathetic.”

Scarcity

The President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, said the volatility of the local currency had continued to underpin the nation’s slow economic growth.

He said, “The high demand pressure at the 1&E window and the parallel market due to lack of sufficient liquidity have been fuelling the widening gap between the I&E Window and the parallel market rates.

“Combination of several factors including the investors’ backlog estimated at $6.8bn and disincentives to bring fresh funds into the economy is one of the major concerns.

“In the same vein the dwindling receipt of Diaspora remittances and resurrection of subsidy on petrol are major deterrents and big concerns to fresh liquidity in the market.”

According to him, the uncertainties and loss of public confidence on the local currency has heightened demand pressure in all segments of the market.

He said, “In addressing the challenges of the I&E window, there is need for the legislation of the willing buyer and willing seller concept. This will lead to enhanced liquidity in the foreign exchange market and enhance public confidence.

“It is also imperative in this regard to recognise the inclusion of the BDCs at the I&E window to continue to play their roles of moderating and correcting the markets.”

He advised the Federal Government on how to bring in more Diaspora remittances.

The CBN had recently announced operational mechanism for the BDCs to trade foreign currencies at similar rates obtainable on the Investor & Exporter forex window.

It gave the directive to all BDCs and the general public in a circular number TED/FEM/PUB/FBC/001/007 dated August 17, 2023, titled, ‘Operational mechanism for Bureau De Change operations in Nigeria’.

The circular stated, “The spread on buying and selling by BDC operators shall be within an allowable limit of -2.5 per cent to +2.5 per cent of the Nigerian exchange market window weighted average rate of the previous day.

“Mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly), on the financial institution forex rendition system which has been upgraded to meet operators’ requirements.”

Confidence

The Director/Chief Executive Officer, Centre for The Promotion of Private Enterprise, Dr Muda Yusuf, said the new CBN Governor, Dr Olayemi Cardoso, was assuming the leadership of the CBN at a very crucial time in the economic history.

He said, “There is a serious confidence crisis in the foreign exchange market fuelling an unprecedented speculative onslaught on the naira. The economy is grappling with severe adverse effects of depreciating exchange rate, soaring energy costs, ravaging inflationary pressures, huge backlog of foreign exchange obligations that needs to be cleared and debt service obligations that need to be redeemed. Sadly, these outcomes are manifesting at a time when the country’s foreign reserves have been substantially encumbered.

“There is an apparent deceleration in the pace of economic reforms as the outcomes are at variance with expectations. The social costs of the reforms were substantially higher than anticipated, resulting in push-backs from the civil society.”

He said the economic management orthodoxy of market forces was being called to question in the light of the social outcomes of the market-oriented reforms.

He said there was a measured re-emergence of political economy with the reappearance of fuel subsidy and divergence in exchange rates.

This was evidently an economic management quandary that the new economic team would have to manage, and urgently too, he said.

Yusuf said, “Meanwhile, the CBN must ensure strategic and transparent intervention in the forex market to minimise volatility, as far as the reserves can support. In addition to the I and E window, it has become necessary to create an autonomous window in the banking system where the currency can trade freely without any encumbrances. This is necessary to avert the diversion of remittances to other jurisdictions or the black market. We cannot afford to live in denial at this time.

“The clearance of the backlog of forex obligations should be accorded high priority to restore the confidence of domestic and foreign investors.”
PUNCH

Business

Confusion Over Euro-Africa CCI’s $250m Investment In Edo

Published

3 days ago

September 29, 2025

Editor

The $250m investment deal Governor Monday Okpebholo claimed to have secured during his recent trip to Scotland is generating ripples over capacity of the European African Chamber of Commerce and Industry (EACCI) to make such a huge investment.

The EACCI, headed by a Drector General, Dr. Kingsley Obasohan, is not known to have made any prior investment in Edo State or any part of the country.

Obasohan, who attended the Edo State Global Investment Summit virtually, announced the $250m investment.

He said the investment would be made for a period of three years.

An online search was launched to unravel the EACCI as well as the man Obasohan.

A number on the site was answered by a lady who claimed not to understand English language.

Several foreign partners were listed on the site as board members and advisory council.

Some closed associates of Obasohan said he would have to get clearance from the Board members before talking to journalists on the issue.

Spokesman for the Edo Peoples Democratic Party, Daniel Noah Osa-Ogbegi, said the party would hold Governor Okpebholo accountable to Edo people and demanded clarity on the $250m investment from Glasgow.

Osa-Ogbegi said the proposed investment has become a source of embarrassment to Edo people because of unfolding information about EACCI.

He said the party would shine light on fiscal management practices that appeared to ignore transparency and responsibility.

Secretary to the State Government (SSG), Umar Musa Ikhilo, had earlier said those that attended the Glasgow summit were interested in keying into the SHINE agenda of Governor Okpebholo.

“One of the chambers of commerce that attended, the European African Chamber of Commerce and Industry signed an MoU with the Edo State Government to invest a sum of $250 million over the next three to five years.

“Last year, diaspora remittances were the second-highest source of foreign income in Nigeria after crude oil, over $20 billion, but only 2% of that went into investment. We are creating a vehicle to help convert more of that into direct investments.”

He added that a delegation from Scotland was expected to visit Edo State in the coming months to explore specific investment projects as a follow-up to the summit.

Business

Dangote Hits Out At PENGASSAN, Says Union ‘Serial Saboteurs, Serving Oligarchs’

Published

4 days ago

September 28, 2025

Editor

The management of Dangote Petroleum Refinery has berated the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), accusing the union of decades-long sabotage of Nigeria’s oil and gas sector and serving the interests of its leaders rather than ordinary Nigerians.

In a statement issued at the weekend, the refinery described PENGASSAN’s latest directive to cut crude oil and gas supplies to the facility as another act of economic sabotage designed to inflict untold hardship on Nigerians.

“Indeed, over time, the Association has consistently proved itself as serving interests other than those of Nigerians and Nigerian workers,” the statement declared.

Dangote recalled that in 2007, when the Federal Government sold its moribund Port Harcourt and Kaduna refineries to Blue Star Consortium, led by the Dangote Group, for $750 million, it was PENGASSAN and its ally, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), that sabotaged the deal. “It is now obvious to everyone that the FGN’s decision at the time was the right one and that PENGASSAN and NUPENG ignominiously wrote their names on the wrong pages of history,” the company said.

The refinery also faulted the union’s role in the much-publicised rehabilitation of the Port Harcourt Refinery, describing it as a “ruse” which PENGASSAN “knowingly celebrated despite being a scam on Nigerians.” The statement further accused the union of opposing amendments to the Petroleum Industry Act (PIA) that would have freed up federal liquidity and attracted private-sector funding into Nigeria’s upstream oil ventures.

Beyond policy obstruction, Dangote Refinery accused the association of mismanaging billions of naira in annual check-off dues to allegedly bankroll the “lavish lifestyles” of its leaders, without accountability to members. By contrast, the refinery highlighted its own record of economic contributions within a short period, citing road construction, worker training, the creation of thousands of Nigerian jobs, and a compensation structure that “outdistances the best in the Nigerian oil and gas industry.”

“The Dangote Group is the highest employer of labor in Nigeria and the highest contributor to the tax revenues of Nigeria and its sub-nationals. What comparable social responsibility has PENGASSAN, with its billions of Naira in annual check-off dues and subscriptions, lived up to?” the statement queried, challenging the union to publish its audited accounts for the past ten years. “Can it publish publicly its account for the last 10 years and list out its corporate responsibility activities within that timeframe?”

The refinery insisted that PENGASSAN’s recent directive to withdraw services and cut off essential fuel supplies, including but not limited to petrol, diesel, kerosene, cooking gas and aviation fuel was reckless, lawless and dangerous. It said the order is not about protecting Nigerian workers, but it is about a cabal of oligarchs weaponising hardship against over 230 million Nigerians.

“In the process, it (PENGASSAN) cares little if at all about the unbearable hardship and terror it would thereby inflict on all Nigerians, including but not limited to the provision of essential services in our hospitals and medical facilities, schools (nursery and right up to tertiary and research institutions), emergency services, communications facilities, transportation systems, etc,” it said.

Dangote Refinery called on the Federal Government and security agencies to step in immediately to protect the facility and the nation’s energy security, stressing that the union must not be allowed to “bully Nigerians into chaos and economic sabotage.”

According to Tribune Online, the federal government has announced readiness to broker peace between Dangote Refinery and PENGASSAN, inviting both to a meeting scheduled for Monday.

Business

Fuel Scarcity Looms As PENGASSAN Stops Gas, Crude Supply To Dangote Refinery

Published

5 days ago

September 27, 2025

Editor

The industrial dispute between the Dangote Petroleum Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria took a dramatic turn on Saturday as the union ordered seven branches to cut off crude oil and gas supplies to the $20bn facility.

In a letter dated September 26 and signed by its General Secretary, Lumumba Okugbawa, the union accused the refinery’s management of sacking its members in retaliation for exercising their constitutional right to join the union.

The union’s move marks an escalation in the standoff, with PENGASSAN accusing the refinery of anti-labour practices and the unlawful sack of its members.

In the directive issued to its branch chairmen, PENGASSAN instructed its branch chairmen in key upstream and midstream oil companies, including TotalEnergies, Chevron, Seplat, Shell Nigeria Gas, Oando, and Nigerian Gas Infrastructure Company, to immediately cut off all crude oil and gas supplies to the refinery.

The directive comes after PENGASSAN alleged that Nigerian workers were sacked by Dangote Refinery after joining the union, claiming that management also withdrew staff buses and denied entry to locals while allowing expatriates access.

The union threatened to picket the refinery if the situation was not addressed.

In a statement on Friday, the refinery clarified that only a small number of workers were affected by what it described as a reorganisation aimed at preventing acts of sabotage within the facility. It said over 3,000 Nigerians remain in employment, rejecting claims of mass layoffs.

Dangote maintained that the restructuring was necessary after what it described as recurring acts of sabotage in different units of the refinery, which posed serious risks to human lives and operations.

As a result, PENGASSAN instructed its branches in TotalEnergies, Seplat, Chevron, Oando, Shell Nigeria Gas, Renaissance, and NGIC to cut gas supply to the refinery immediately.

The union described the move as “illegitimate” and accused the refinery of spreading misinformation instead of addressing the matter through dialogue.

“As you are aware, the Management of Dangote Petroleum Refinery has disengaged our members in reaction to the exercise of their constitutional right to being unionized.

“They have gone further on a mission of misinformation and propaganda to justify this illegitimacy rather than engaging meaningfully with us to right the wrong.

“Consequent to these, you are hereby directed to cut off gas supply to NGIC effective immediately. All crude oil supply valves to the Refinery should be shut. The loading operation for vessel headed there should be halted immediately,” the directive read.

The union further mandated the NGIC Chairman to ensure strict compliance with the order and told all branch chairmen to give regular updates on the action taken.

“NGIC Chairman, ensure that gas supply to the Refinery is cut off effective immediately. All chairmen on this summons are to report promptly the progress of the directive. Kindly accept the assurances of our highest esteem. Thank you,” the statement read.

Reaffirming its solidarity, PENGASSAN ended the directive with its slogan: “Injury to one! Injury to all!”

On Thursday, the company announced it would suspend petrol sales in naira from September 28 following the exhaustion of its crude-for-naira allocations.