Kehinde Fajobi
The Manufacturers Association of Nigeria (MAN) reported that 16 major manufacturing firms experienced cumulative losses of ₦792 billion from 2023 to 2024, largely due to the naira’s devaluation.
Chairman of MAN’s Ogun State chapter, Mr. George Onafowokan, warned that the manufacturing sector faces an unprecedented crisis following the government’s decision to float the naira in 2023.
In his address at MAN Ogun’s 39th Annual General Meeting, titled “Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability,” Onafowokan noted that the currency’s decline had been a major contributor to inflation.
He pointed out that “the fall of the national currency has been partially responsible for high inflation rates in the country,” with inflation rising to 28.92% by December 2023, according to the National Bureau of Statistics.
He added that the government, through the Nigerian National Petroleum Company Limited, had secured a $2.25 billion oil-for-cash loan from the African Export-Import Bank to boost dollar liquidity.
Onafowokan, who is also the Managing Director of Coleman Wires and Cables Industries Limited, explained that foreign exchange losses have severely impacted the sector.
“In fact, approximately 16 major manufacturing companies lost a combined total of ₦792 billion due to the depreciation of the naira resulting from monetary policy reforms,” he stated.
“The impact on SMEs and smaller manufacturers has been equally devastating.”
He highlighted the scarcity of affordable foreign exchange as a critical issue.
“This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports,” Onafowokan said.
With limited forex at official rates, manufacturers have turned to the parallel market, where rates are significantly higher, further driving up production costs and straining businesses reliant on imported raw materials and machinery.
Additionally, Onafowokan criticised poor road infrastructure in Ogun State, noting that deteriorating road conditions hinder goods transportation, lead to frequent accidents, and escalate logistics costs.
He further noted that recent electricity tariff hikes by the Nigerian Electricity Regulatory Commission have placed additional strain on manufacturers, squeezing already narrow profit margins.