The Manufacturers Association of Nigeria (MAN) has warned that the lingering cash strapping occasioned by new Central Bank cash policy could result in a 25 per cent downturn in purchase of locally manufactured products.
MAN director general Segun Ajayi-Kadir said in Lagos on Friday in Lagos failure of CBN to a seamless transition from old naira to new naira notes would be inimical to manufacturing.
He said should the current hardships being experienced in accessing money persisted for the next three weeks, there would be a possible drop of 25 per cent in monthly sales of made-in-Nigeria goods.
Mr Ajayi-Kadir noted that as purchases from the retail end, mostly transacted in cash, dry up; there would be a sharp drop in wholesale purchases leading to a glut of unsold inventories in factories.
He added that the situation which was not good for manufacturing, for the government and for the ordinary citizen would lead to a compounded crippling lack of patronage for the domestic manufacturer.
Mr Ajayi-Kadir also said that the development would also deny the government the revenue that would have accrued from consumption taxes and result in the disruption of the daily life and needs of the average Nigerian.
“To be clear, there is no doubt that the currency redesign is desirable; there are socioeconomic and political imperatives for the change.
“It is a critical element of the CBN cashless economy policy that should have far reaching positive results for the economy.
“However, the continued scarcity of the new redesigned naira notes is quite worrisome.
“With our growth prospects heading further south, we can ill-afford a downturn in our Gross Domestic Product (GDP).
“The negative impact it portends for local producers, the agricultural and distributive segments of our economy is huge.
“It may worsen the bashing our economy has received from both external and internal shocks in recent times,” he stressed.
Mr Ajayi-Kadir cautioned that adequate measures should be put in place to ensure a smooth currency transition, particularly in the unbanked areas of Nigeria.
He charged the CBN and Bureaux de Changes to be most engaging at the highest level at this time.
According to him, there is a need for strategic communication and joint operations to ensure widespread and sustained availability and circulation of the redesigned naira notes.
“It is baffling to approach a bank only to be told that there is neither the old nor the new naira notes.
“We hope that the resumption of payment across the counter in the banks and the intensification of the CBN special cash swap arrangement in remote areas will yield positive results.
“I hope that what the country is experiencing is a temporary pain and that government will do well to bring the hardship to an end immediately.
“We must make haste to ensure that the price to be paid for this otherwise laudable policy does not outpace the gains,” he also cautioned.