Nigeria: Manufacturers Urge New Central Bank Governor to Address Inflation, Forex Scarcity, and Rising Debt

Manufacturers in Nigeria have called on the newly nominated central bank governor, Governor Cardoso, to swiftly address pressing economic challenges, including surging inflation, forex scarcity, and the nation’s increasing debt burden, in order to alleviate the difficulties currently facing the real sector of the economy.

In an exclusive interview, Segun Ajayi-Kadir, the Director-General of the Manufacturers Association of Nigeria, expressed the uncertainty and anxiety that characterized the period between the exit of Governor Emefiele and the appointment of Governor Cardoso. He emphasized the manufacturers’ hope that this change would create a conducive environment for the promised financial sector reforms.

Ajayi-Kadir highlighted various critical issues, stating, “We are grappling with unimpressive forex reserves, a high inflation rate, limited room for raising market rates to more attractive levels, a substantial debt profile with escalating servicing costs, and a public aversion to additional borrowing.”

He stressed the need for strategic balance between combating inflation and stimulating economic growth through effective funding. He noted that managing long-term macroeconomic factors would be a significant challenge for the new CBN Governor.

Ajayi-Kadir also emphasized the importance of aligning fiscal and monetary policies and expressed manufacturers’ expectations that the new Governor would actively support this policy synchronization, which they felt was lacking in the previous administration.

Regarding recent changes in the exchange rate system, he pointed out that manufacturers depend on forex to import raw materials, machinery, and spare parts that are not locally available. Therefore, they are looking forward to more supportive policies in this regard.

He concluded by emphasizing the need for the CBN Governor to closely monitor the dynamics of the economic environment and engage with key stakeholders during monetary policy formulation, evaluation, and monitoring. Ajayi-Kadir recalled past attempts by manufacturers to express concerns about the management of forex disbursements but stated that they had not received the desired response from the former CBN Governor.