The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), has received some fresh complaints from different firms in the country of their intention to lay-off workers, shutdown production and relocate outside the shores of Nigeria. NACCIMA disclosed this in a report obtained by New Telegraph in Lagos.
NACCIMA, which is the mouthpiece of the organised private sector (OPS) in the country, said that the complaints from the affected firm have to do with the continued foreign exchange scarcity, low production output, high energy cost and decline in profits. A top member of NACCIMA and President, Abuja Chamber of Commerce and Industry (ACCI), Tony Ejinkeonye, said that majority of manufacturing companies and blue chip companies were groaning over the investment clime in the country, as the on-going economic recession took severe toll on their businesses.
He explained that these affected companies are not happy with the way government is handling the recession, lamenting that they may be forced to carry out their restructuring exercise, which would result in mass job losses and relocation of more local companies to neighbouring countries. His words: “Several members of the Chamber have complained bitterly over the difficulty in accessing foreign exchange to procure their raw material. The situation is really quite pathetic for businesses especially those in the manufacturing sector.
“Our members are groaning over low output occasioned by non-availability of forex to get raw materials for production, which in turn has affected their turnover drastically. Just today, we received notice from different companies threatening to lay-off their workers or shut down production in the meantime if forex scarcity continues, while others are making plans to relocate to neighbouring African countries.
“Meanwhile, one only hopes that government can come up with a strategy to address the current scarcity of foreign exchange so as to avert impending economic misfortune.” The ACCI president states that about 70 per cent of Small and Medium scale Enterprises (SMEs) companies operating in Abuja are currently at risk, as they battled to remain in business.
He added that SMEs owners have lost huge profits to the country’s economic recession due to the economic recession. “In the last eight months, SMEs loss to the current economic woe in value terms is substantial going by reports we have received so far,” Ejinkeonye said. He explained that the forex scarcity has continued to fuel uncertainty in the country’s real sector, especially in manufacturing sector, adding that this has adversely affected production output of manufacturers and their profits.
In his own submission, the Director- General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, concurred that the general contradiction in the country’s economy was having adverse effect on many operating companies operations. Yusuf said: “Again, the increase in job cuts, lay-offs and others that are happening in the country is largely as a result of the general contradictions that we are witnessing in the economy nowadays because once there is a slowdown in the economy, it affects virtually all sectors of the economy.
You can see that profitability in the economy has declined marginally; capacity of many businesses to sustain their enterprises has also been weakened; purchasing power declined; cost of production gone up and access to foreign exchange rate a challenge.” For example, Guinness Nigeria reported that earnings after tax fell 83 per cent in the nine months through March, while revenue dropped 18 per cent to N69.6 billion ($220 million). Also, the shares are down 17 per cent this year, compared with a 3.7 per cent fall in the Nigerian Stock Exchange All Share Index