MAN to CBN: Stop banks from punishing manufacturers over unsettled forex obligations

In a statement issued on Thursday and signed by the Association’s Director General, Segun Ajayi-Kadir, MAN called on the Central Bank of Nigeria (CBN) to intervene urgently.

“We call on the Central Bank of Nigeria to direct the concerned commercial banks to immediately unfreeze the accounts of innocent manufacturers in relation to the vexed issue of forex forwards,” the statement read in part.

Ajayi-Kadir emphasized that manufacturers, as a critical sector of the Nigerian economy, rely heavily on access to Forex for the importation of raw materials, machinery, and equipment that are not locally available. According to him, recent actions by some banks are undermining manufacturers’ operations through no fault of their own.

“However, recent developments have shown a troubling trend in the way banks are handling the matter, to the extreme detriment of manufacturing industries, who have the needless misfortune of being at the receiving end of a problem they didn’t create and shouldn’t suffer,” he stated.

He noted that several MAN members have reported experiencing unwarranted bottlenecks, excessive scrutiny, and, in some cases, illegal freezing of their corporate and personal accounts—all of which severely disrupt production activities and threaten business continuity.

Citing a specific case, Ajayi-Kadir mentioned KAM Industries Nigeria Limited, a major player in the steel industry and a member of MAN, which is currently embroiled in a forex forward-related dispute with a commercial bank. He warned that this case is just one of many, with several manufacturers suffering similar fates in silence.

“This rather unfortunate treatment of private business is only the reported one, and there are several others undergoing similar harrowing experiences. This should stop in the interest of economic development of Nigeria, job security, and business sustainability,” the statement said.

MAN clarified that, as is standard practice, commercial banks collect payments in Naira from their customers, either directly or via credit facilities, for the purpose of obtaining FX for importing raw materials. Once the banks remit these funds to the CBN, the manufacturers’ obligations are considered fulfilled.

“Given this background, MAN asserts that its members are not liable for delays or complications arising after the remittance of funds to the CBN by commercial banks,” the statement stressed.

Ajayi-Kadir urged banks to demonstrate understanding and support, rather than resorting to punitive measures against the very businesses that drive economic productivity.

“Our members should not be harassed by the banks. The banks should show understanding and be supportive as we all seek a solution to this rather unfortunate and unexpected impasse. As the innocent one and quite evidently the weakest and most vulnerable in the tripod, it is unconscionable that manufacturers are bearing the brunt,” he added.

MAN reaffirmed its commitment to advocating for its members and pledged to continue working toward a conducive business environment.

It also expressed readiness to mediate discussions between affected members and the concerned banks to resolve the crisis amicably.

In August 2024, MAN asked the CBN to resolve the unsettled $2.4 billion forex forward claims by manufacturers in the country.

The organisation stated that the apex bank attributed its inability to honour the contracts to an investigation by the Economic and Financial Crimes Commission (EFCC) into certain foreign exchange transactions.

The organisation stated that the apex bank attributed its inability to honour the contracts to an investigation by the Economic and Financial Crimes Commission (EFCC) into certain foreign exchange transactions.

The CBN said it had settled “all valid” foreign exchange backlogs amounting to $7 billion in 2024.

President Bola Tinubu, in May 2023, initiated reforms to lure investors back to the nation’s market by allowing the naira to trade more freely and converge multiple exchange rates toward a single rate.