Featured Manufacturing

MAN urges CBN to reverse third-party procurement policy

The Manufacturers Association of Nigeria has urged the Central Bank of Nigeria to reverse its new policy directing authorised dealers to desist from opening of Form M, whose payments are routed through a buying company or any other third parties.

In a statement signed by the President, MAN, Mansur Ahmed, the association acknowledged the good intention of the bank, but said the impact of the decision was inimical to the survival of many manufacturing concerns that were not involved in any unethical practice.

The body said the additional hamstring on the economy was likely to erode the recent improved performance on the ease of doing business ranking.

“Given the prevailing extremely stressful operating environment our fragile manufacturing sector is contending with, the implementation of this new directive is like hammering the last nail on the coffin of many of our ailing members,” the statement said.

The association pointed out that most manufacturers, especially small and medium-sized enterprises, deal with accredited agents for their supplies as many Original Equipment Manufacturers abroad did not sell directly to individual buyers.

It also noted that it was in line with global best practice for OEMs and large International Manufacturing Companies operating in multiple countries and with sourcing needs in various jurisdictions to leverage on the economics of scale to secure lower prices through centralised procurement.

It said, “In Nigeria, central procurement plays a critical role in the production process, an absence of same will hamper manufacturers operating in the country and may result in factory shutdowns.

“In the absence of a global procurement agency, most companies would not have access to the final suppliers, who consider the inherent country risks a disincentive for trading directly with companies in Nigeria.”

MAN said the procurement agencies provided a vital interface between the final suppliers and the manufacturers, and allowed some extended payment timelines by granting credit in periods of foreign currency scarcity.

The association said if CBN was of the view that the audit of the activities of a central procurement agency in terms of price verification was impossible, a phased approach should be adopted to the elimination of their use in Nigeria.

It also recommended that the bank put in place a monitoring mechanism framework to ensure unverifiable claims by some manufacturers were identified and dealt with accordingly.

Related posts

NiMet predicts three-day hazy weather condition from Wednesday

Our Reporter

‘Why Africa needs special bank to fund hydrocarbon projects’

Our Reporter

COVID-19: NCDC reports 165 new infections in Nigeria, total 210,460

Our Reporter

Naira remains firm, exchanges N462 to dollar

Editor

We now depend on our wives to feed after losing everything — Traders at burnt Lagos plank market

Our Reporter

Head of Sokoto Caliphate kingmakers, Danbaba dies auddenly, buried in glory

Our Reporter