Manufacturers Allege 25% Sales Drop Over Cash Crunch

Manufacturers have revealed that the protracted scarcity of naira notes has led to a 25 per cent drop in sales of manufactured goods.

This was disclosed in a statement signed by the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir.

The statement, which urged the government to permanently resolve the lingering difficulties associated with the currency transition, noted that “this has resulted in a more than 25 per cent dip in sales of manufactured products.”

The president of the association, Otunba Francis Meshioye, during an interaction with journalists last month expressed worry that the scarcity of naira notes could lead to reduced sales of manufactured goods.

According to him, the current naira scarcity and the pressure the cash crunch has put on online transactions have negatively affected the free flow of goods.

He said, “I want to assume that this is a very short-term problem. It is general. Even if you want to do e-banking, there are some things you cannot do at the moment. We have problems. PoS is not working.

“There is no way the scarcity of something that is essential to the consumer will not affect the producer. We feel it because it hinders the proper flow of our goods to the end user. What effect is that going to have? It means we will pile stock and when we pile stock, it means cash is trapped. We pay high interest rates and they would not yield good returns and investments go to where returns come regularly.”

He noted that investors do not joke with their money.

“This is a very big issue in the economy. If you put all these together, you will agree with me that we are really facing a critical time as manufacturers.”

Speaking exclusively with The PUNCH, the Chief Executive Officer of Coleman Technical Industries Ltd, George Onofowakan, said that the 25 per cent dip in sales as stated by MAN did not reflect the losses suffered by some manufacturers.

According to him, the naira scarcity and the uncertainty that surrounded the general elections led to a serious dip in sales for most manufacturing firms.

 Onofowakan said, “The fact of the matter is that workers come to work using public transportation. I heard of a company that closed down because it did not have the numbers for production. They had to shut down because the workers could not get to work. Thank God some of us even have transport buses for our workers. That was how we were able to get the numbers we needed for production, but most people in manufacturing were struggling with a workforce reduction of about 50 per cent.

“The one that closed down produces packs that eateries use. It could not get workers to come because they could not get transport. So, you can imagine many other manufacturers like that who could not get workers to come to work. They are struggling.”

Onofowakan further stated that as long as the struggle for cash availability continues, manufacturers would have a hard time getting back to optimum levels of production.

 On his part, the Managing Director of Metro Media Communications, Michael Nzeagwu, told The PUNCH that many of the company’s clients that are into FCMG had been seriously hit by the cash crisis.

Nzeagwu said, “It did not affect us directly, but because some of our clients are into FMCG, we feel the impact.”

March 18, 2023