• Hausa Edition
  • Podcast
  • Conferences
  • LeVogue Magazine
  • Business News
  • Print Advert Rates
  • Online Advert Rates
  • Contact Us
Tuesday, August 26, 2025
Leadership Newspapers
Read in Hausa
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us
No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us
No Result
View All Result
Leadership Newspapers
No Result
View All Result

Companies Incur N1.5trn Forex-related Transactions Losses – MAN

… Says unredeemed $2.4bn forward contracts trigger crisis

by Olushola Bello
1 year ago
in Business
MAN
Share on WhatsAppShare on FacebookShare on XTelegram

Manufacturers have said the continued non-redemption of the $2.4 billion forward contracts from the backlog of $7 billion posed a grave threat to the survival of some Nigerian companies and job loss of thousands of workers.

Advertisement

This is as companies grapple with the inability to fulfil their offshore obligations due to the Central Bank of Nigeria (CBN) non-delivery of dollars, many face the grim prospect of downsizing or shutting down operations completely.

Foreign exchange forward contracts are financial instruments and are globally practised to enable businesses to hedge against exchange rate fluctuations by locking in a future exchange rate. The Central Bank of Nigeria traditionally issues these contracts, promising to deliver foreign currency at a specified future date in exchange for upfront naira payment.

The Manufacturers Association of Nigeria (MAN) said that the CBN’s non-fulfillment of its forward contract obligations has led to a cascade of negative consequences as within the last six months, companies have incurred over N1.5 trillion in forex-related transactions losses, contributing to the poor and worsening performance of many businesses.

“The resulting exchange rate differentials and the burden of interest on loans to meet Naira deposit requirements have been entirely transferred to manufacturers, increasing production costs and impacting product prices,” the Association said.

RELATED

PremiumTrust Bank Reassures Stakeholders Of Strong Performance, Profitability

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

3 hours ago
JUST-IN: NAICOM Revokes Operational Licenses Of Niger Insurance, Standard Alliance

Delayed Guidelines Drag Insurance Recapitalisation Process

19 hours ago
ADVERTISEMENT

The director-general of MAN, Segun Ajayi-Kadir stated that “this has triggered a severe crisis for the manufacturing sector and Nigerian economy. Worse still, the commercial banks have continued to charge dollar accounts along with other naira bank charges such as 35 per cent interest rate on the facilities that these companies have with their banks.

“All these have significantly eroded the working capital of the companies who barely make margins of five per cent on the sales of the products. This rather worrisome breach of contract has further exacerbated currency risk for businesses, leading to substantial financial losses and operational disruptions.”

He added that businesses with substantial foreign exchange liabilities face acute credit and liquidity risks due to their inability to settle forward contracts, saying that “this strains cash flow and jeopardises overall financial stability. While many small and medium-sized enterprises have been forced to close or temporarily suspend operations, larger corporations have incurred massive foreign exchange losses exceeding over N300 billion in the second half of 2023.

ADVERTISEMENT

“This situation has been exacerbated by the continuous depreciation of the naira, which has depreciated by more than 72 per cent, from N450 to N1600 per dollar over the past year. Financial planning and budgeting have been severely compromised due to the uncertainty surrounding future exchange rates. The cascading effects on the economy are far-reaching, impacting production, employment, government revenue, and overall economic growth.”

Ajayi-Kadir pointed out that businesses are struggling to meet their loan repayments, leading to the rescheduling and restructuring of loan terms, adding that “due to numerous challenges, such as high production costs and low consumer demand currently confronting manufacturers, there is little hope of meeting financial obligations as scheduled.

“As a result, these rescheduled loans often come with higher interest rates. The immediate implication of this is the declining contribution of the sector to the overall economy. The erosion of trust among foreign suppliers and financial institutions, triggered by businesses’ inability to honour their initially issued letters of credit, has further compounded the challenges of foreign financial flows and investment in the country. All these adversely affect the business operations and the Nigerian economy at large.”

MAN implored the CBN to give serious and expedited consideration to the imperative of the sanctity of contracts, explore avenues to resolve outstanding obligations, and prioritise the interests of businesses that have acted in good faith.

MAN DG emphasised that “the resulting financial strain on manufacturing businesses has led to widespread closures, job losses, and economic turmoil. The manufacturing sector has borne the brunt of this crisis, with a staggering 108.7 per cent increase in job losses in 2023 alone.

To prevent further damage, MAN urged collaboration between the CBN, the Federal Ministry of Finance, and the private sector to develop a sustainable framework for resolving outstanding forward contracts and improving foreign exchange inflows, explaining that by prioritising the survival of the manufacturing sector, the government can mitigate the negative impacts of this crisis and foster economic recovery.


Join Our WhatsApp Channel

Nigerians can now earn US Dollars monthly by acquiring domains cheaply and reselling for profits up to $18,000 (nearly ₦30Million). Beneficiaries include professionals, entrepreneurs, civil servants and more. Click here to start.


Tags: Man
SendShare10173Tweet6358Share
ADVERTISEMENT
Previous Post

9mobile Appoints Adedeji As Chief Technical & Information Officer

Next Post

Nigeria’s Import From Malta Jumps From Zero To N1.03trn In 1 Year

Olushola Bello

Olushola Bello

You May Like

PremiumTrust Bank Reassures Stakeholders Of Strong Performance, Profitability
Business

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

2025/08/26
JUST-IN: NAICOM Revokes Operational Licenses Of Niger Insurance, Standard Alliance
Business

Delayed Guidelines Drag Insurance Recapitalisation Process

2025/08/25
Large-cap Stock Drives Local Bourse To N180bn Gains
Business

Shareholders Get N117.86bn Half-year Dividends From 12 Listed Firms

2025/08/25
UBA Bank plc
Business

UBA Customers To Win N150m In Super Savers Promo

2025/08/25
Bureau Rate NIMASA High On Public Service Reforms
Business

NIMASA, Engineers Strengthen Collaboration For Blue Economy Growth

2025/08/25
Ojulari’s First 100 Days at NNPC Ltd: A Bold Start Anchored On Reform, Transparency, And Clean Energy
Business

After 3 Misses, NNPC Sets Nov For AKK Gas Pipeline Completion

2025/08/25
Leadership Conference advertisement

LATEST

We Must Invest In Cyber Defence, Artificial Intelligence, Indigenous Military Technology – CDS

Security Summit Seeks End To Killings In Benue

Gombe Gov Signs Bill Creating 13 LCDA

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

FG Issues Fresh Flood Alert To 9 Northern States

We’ll Do More To Secure Katsina – COAS

Parties Accept Mediation In Abia Land Dispute

PDP’s Zoning Of Presidential Ticket To South Sparks Comments

Oil Theft Nearly 100% Eliminated, Says NNPCL GCEO

FG Signs BASA Agreement For Direct Flights To Brazil

© 2025 Leadership Media Group - All Rights Reserved.

No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us

© 2025 Leadership Media Group - All Rights Reserved.