Do you know that most businesses in Nigeria are basically struggling to survive in Nigeria’s hostile business environment?
So as naira continues to weaken, manufacturers and business owners have found themselves in a hot pot of soup.
Because going forward high inflationary pressure will be more, reduced profit margins and limited access to foreign markets will be the new norm.
It is on this premise that the stakeholders in the real sector have voiced their concerns about towards the dollar/naira drama being witnessed.
“The naira’s slide has affected industry growth and business capacity in the real sector. A trend which has grave implications for the economy and private businesses.”
This view was made known by the Director-General, Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde.
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Capital And Income Has Shrunk
According to Oyerinde, “The working capital of private businesses and the real income of Nigerians have both shrunk due to high inflation.”
He urged government to return exchange rate management to a guided float regime where the naira could be supported with complementary policy to maintain stability against collapse.
The Director-General, Nigerian Textile Manufacturers Association, Hamma Kwajaffa, said “As a result this situation, many companies have been forced to fold up.
Others are merely reducing their workforce to stay afloat.”
According to him, “Naira’s depreciation has made business environment hostile to many manufacturers and business owners who now source forex at the black market.”
It’s a fact that many companies are folding up.
Government claims to be relying on the private sector to create jobs, but companies are retrenching because every employer must learn how to break even with some profits.
At this rate it impossible for local manufacturers to produce and export.
He said “Companies are leaving Nigeria, moving to Ghana.”
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“We’re not encouraging local production, but we’re going about begging investors who won’t come because the environment is not good.”
He warned that “Nigeria may become a dumping without the right infrastructure, and if we’re not competitive, with the implementation of African Continental Free Trade Area (AfCFTA).”
Kwajaffa, also said the reversal of the FX ban on 43 items by the Central Bank of Nigeria came at the wrong time.
Meanwhile, a business woman, who deals in imported fabrics, noted that as of yesterday, a dollar was quoted to her at ₦1,200.
She said, “Our products are now expensive because we sell in line with the dollar rate. It has been very tough recently because the rate changes every day.”
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Phone dealers also said the naira’s free fall had affected the prices of mobile phones and computer systems.
Entrepreneurs say the continued slide of the naira had made it difficult for them to remain in business.
