Manufacturers face huge losses as raw materials stranded at ports for weeks

Nigerian manufacturers are facing huge financial losses and the risk of shutting down as a result of a major ‘glitch’ in the clearing system of the Nigeria Customs Service (NCS), Business Hallmark can report.

Owing to the glitch, raw materials imported from abroad by the manufacturers have been stuck at Nigerian ports for weeks, costing them valuable production time and billions of naira.

Speaking to BH on the glitch and its effects on its members, the Director General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, blamed the difficulties manufacturers and importers face in clearing goods in the last few weeks on a ‘glitch’ within the Customs Service.

According to Ajayi-Kadir, some of the materials may not be usable again by the time the glitch is fixed, and they are no longer available in the ports.

The MAN DG said he had taken the matter up with the head of Customs and has been assured that the error would be fixed soon and activities would return to normal.

The MAN boss added that manufacturers are dealing with bigger challenges, including the four per cent free on board (FOB) that was supposed to be shelved.

He lamented that importers are still being charged the levy as customs said they are yet to be informed of a presidential order to suspend the tax.

“We continue to object to it; it is ill-timed and not manufacturing-friendly. We will continue to fight to ensure it is withdrawn completely.

“Because of these unnecessary and added costs in the last few weeks, by our calculation, our import costs have gone up by about 186 per cent.

“This is extremely unreasonable and unsustainable. At the end of the day, we are going to pass on these costs to end users and consumers. We are not philanthropists; we are in business to make money.

“We should be focused on improving the disposable income of the average Nigerian and you cannot do that by fueling inflation and increasing our cost of production”, the MAN DG stated.

He also disclosed that his members are yet to access the N1 trillion promised to manufacturers over two years ago by the Federal Government as part of a  stabilisation plan.

He, however, said the association is working hand in hand with the Bank of Industry (BoI) to ensure that the fund gets to genuine manufacturers.

Also speaking, the outgoing Chairman of MAN, Ikeja branch, Robert Ugbaja, regretted the many challenges local manufacturers are going through.

According to him, over 60 per cent of their members still operate below installed capacity due to inflationary pressures and galloping input costs.

Lending rates, he lamented, remain unfriendly, while logistical challenges continue to disrupt supply chains, especially around Apapa Ports and interstate routes.