Manufacturers warn of potential industrial collapse as frozen accounts and unmet FX obligations cripple operations.
The Manufacturers Association of Nigeria (MAN) has raised serious concerns over what it described as unfair and aggressive actions by some commercial banks in relation to unsettled foreign exchange (forex) forward obligations.
In a statement issued by its Director General, Segun Ajayi-Kadir, mni, the association alleged that banks have resorted to practices that are damaging the manufacturing sector, including illegal freezing of corporate and personal accounts, imposition of arbitrary conditions, and stalling critical production activities.
According to MAN, manufacturers—who depend on access to forex for importing essential raw materials, machinery, and other inputs—have become victims of a problem they did not create.
“It is deeply troubling that our members, having fulfilled their obligations by providing the required Naira to the banks, are now being subjected to undue pressure and punitive actions,” Ajayi-Kadir said. “These actions are inconsistent with the Central Bank of Nigeria’s (CBN) guidelines and are threatening the survival of legitimate businesses.”
KAM Industries Case Cited
MAN cited the case of KAM Industries Nigeria Limited, a major steel manufacturer and member of the association, which is currently entangled in a dispute with a commercial bank over forex forwards. The association described the situation as “just one of many” affecting manufacturers nationwide.
“This unfortunate experience reflects a pattern of highhandedness. There are several similar cases where manufacturers are suffering in silence,” Ajayi-Kadir stated.
Call for Immediate Intervention
The Association urged the CBN to intervene immediately by directing banks to unfreeze affected accounts and facilitate the resolution of outstanding forex obligations.
“Once manufacturers remit Naira to commercial banks or access credit for the same purpose, the funds are then sent to the CBN. At that point, the obligation of the manufacturer is deemed complete,” he explained. “Any delay thereafter is not the fault of the manufacturers and should not be used against them.”
Ajayi-Kadir also stressed the need for cooperation between banks and manufacturers, warning that the ongoing impasse could lead to massive job losses, halted production lines, and a deeper economic downturn.
Towards Lasting Solutions
MAN reiterated its willingness to work with commercial banks, the CBN, and other stakeholders to find a mutually beneficial resolution.
“This is not the time for blame games. We must collaborate to support the country’s industrial base,” he said. “The manufacturing sector is too critical to be subjected to these avoidable disruptions.”
Foreign exchange forwards are agreements between businesses and financial institutions to lock in future forex rates for transactions. Due to FX shortages in Nigeria, many of these agreements have gone unfulfilled, leaving manufacturers in limbo.
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