By Merit Ibe
Outgoing Managing Director/ Chief Executive Officer, May & Baker Nigeria Plc, Nnamdi Okafor, has lamented the stifling forex scarcity and exchange rate volatility which have resulted to China blacklisting Nigerian firms from coming for raw materials over defaults on raw materials order.
Okafor said many members of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG MAN) have been lacking government’s support since the advent of COVID-19 pandemic, saying it was almost impossible to get up to 20 per cent forex needs for their operations.
He pointed out that the scarcity of forex had made cost of production rise astronomically since it was becoming impossible to get forex, coupled with the high exchange rate of between N450 and N480 to the dollar though government pegged the rate at N380 in 2020.
“Indeed, forex is a major issue, whether it is the intervention or our normal operations, it is almost impossible to get up to 20 per cent forex needs for your operations.
“On the impact of the stifling forex, it has made our cost go up because our plan for exchange rate in the budget for this year was N380 based on government’s approval.
Today, we are exchanging dollars for N450 and N470. It has given us huge exchange rate loss now because for some of the LCs that were opened, we have to take care of the loss.
“So, it is a major issue for our company now because it is eating into our profits, and sometimes it also makes it very difficult for us to bring in our products. So, there’s scarcity in the market right now for some of our products.“And the most painful reality is that some of our suppliers, who have confidence in us, gave us credit, but we were unable to pay when the money was due.
We were blacklisted in China that we didn’t pay. The partner reported the case and people were warned they shouldn’t deal with us. It was very pathetic because we don’t have the naira to honour our LC application. It is a big problem for us. As a business, I believe that other companies are in this mess too.”