The Nigeria Employers’ Consultative Association (NECA) has warned that the Central Bank of Nigeria’s recent policy on Form ‘M’ would negatively impact the economy, calling for immediate audience with the apex bank.

The employers’ body, in a letter addressed to the CBN governor, Mr. Godwin Emefiele, said it wants an audience with the CBN office to further engage on the matter, in the interest of finding a solution that would not negatively affesct businesses or the economy.

Director-general of NECA, Dr. Timothy Olawale, who signed the letter, however, commended the Federal Government on its various policies aimed at ensuring the growth and development of the Nigerian economy. He said it was imperative to note the downside of the policy, which had the potential to frustrate the ongoing efforts of government to return the economy to growth, create jobs and prevent economic downturn already worsened by the COVID-19 pandemic.

“The exclusion of procurement companies from Form ‘M’ will cause significant business disruption for many manufacturing companies because of existing medium to long-term contractual obligations with centralised procurement agencies.

Dismantling such arrangements and contracts would not only result in losses for these companies in Nigeria, but would also disrupt production schedules, which are planned long in advance. Other attendant complications on manufacturing companies include a reduction in productivity, loss in business revenues, supply chain disruption, all potentially resulting in loss of employment for many Nigerian employees,” the letter read.

The employers’ body also reasoned that the policy had the potential to worsen the impacts of COVID-19 on the real sector.

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It said, “While we appreciate the need for government to embark on various measures to mitigate the impact of COVID-19, including the restrictions across different sectors, a business survey conducted by NECA with a view to gauging the specific impact of the pandemic revealed that 74.2 per cent of enterprises have either stopped operating or are at their lowest ebb. Furthermore, 78.2 per cent of enterprises in Nigeria have had supply challenges, which would be worsened by the elimination of centralised procurement from their value chain.”

For the successful implementation of the policy, besides engagement with the stakeholders, NECA advised the CBN that a system should be put in place to monitor, identify and penalise abusers of the nation’s foreign exchange mechanism.

It added that, “NECA is pleased to support the development of such systems, in line with global best practice. In the alternative, we appeal to the CBN to convene a stakeholder engagement session with NECA and chief executives of our member companies who are impacted, to arrive at a moratorium that would enable them build a relationship with the final suppliers and original equipment manufacturers over the period of moratorium.”

The employers’ body said it appreciated the intention of the CBN to introduce a product price verification mechanism to forestall over-pricing, and/or mispricing of goods and services imported into the country.

“At NECA, we are committed to collaborating with the CBN in any way practicable, to ensure this objective is fully met without jeopardizsing business continuity for member-companies,” it said.