Covid-19 Palliative: Manufacturers List Gains of N100bn Intervention Fund by CBN
*Decry difficulties sourcing foreign exchange for raw materials
The President of the Pharmaceutical Society of Nigeria (PSN), Mr. Sam Ohuabunwa, Tuesday lauded the Central Bank of Nigeria (CBN) for the N100 billion intervention fund with single digit interest rate for manufacturers in the country as palliatives over the Coronavirus pandemic.
But PSN identified inflation and difficulty in sourcing foreign exchange needed to import raw materials for local production in the country as among the challenges of the beneficiaries.
Ohuabunwa said the loan would go a long way in boosting the capacity of manufacturers in the country, adding that this would have been difficult to raise from commercial banks.
Speaking on the occasion of a capacity building forum organised by the Financial Correspondent Association of Nigeria (FICAN) in Lagos, he said the fund would assist to either build or complete new plants, acquire new machinery that will help in production.
He said all this will lead to expansion of the manufacturing sector and add value.
According to him, manufacturers have already started to apply the funds to improve on their businesses.
He told newsmen, “It is something we have prayed for. It is something that we have cried for. It is something that we have advocated and made case for many years ago that we needed special funding. We have even demanded the Pharmaceutical Industry Bank. So, we are happy that at last, thanks to COVID-19, that the federal government through the CBN has eventually come to our aid. For us the N100 billion was a major response from the government through the CBN.
“I am aware that many of those who applied in the first tier have received approvals and have accessed the funds through their corresponding commercial banks.
“A couple of them have started to apply them to affect what they needed it for capacity building, or building or starting new plants. Getting new equipment and starting new processes to expand their manufacturing and increasing add on and value addition. This shut in the arm from the CBN is supposed to boost that and we are eager to see it happen.”
Ohuabunwa however expressed concerns over the scarcity of foreign exchange, adding that it has become an issue in utilising the loan from the CBN.
He also added that another issue was the effect of inflation on the loan and depreciating naira exchange rate for foreign ecange as among the challenges for beneficiaries of the loan to pay back.
According to him, those who benefited from the loan have issues converting the money into raw materials as a result of shortage of foreign exchange.
“Many of them are running the risk of losing a substantial value of this money to inflation and high level of depreciation of the Naira in the foreign exchange market and are being constrained to shop for foreign exchange from the parallel market.”, he said.
He added, “This is a special project and the CBN should not allow the firms to go through the torture of begging commercial banks or looking for where to scratch out foreign exchange.
Ohuabunwa added that his PSN has been assured verbally that the CBN would address the problem of manufacturers on this.
He said, “We appeal to CBN to make a special allocation to beneficiaries of this fund to be able to import inputs. We have only received their verbal assurance to do something. We will also, be asking for the extension of the moratorium from one year to two years and reducing the rate which is still reasonable at single digit.” .
The President of the Pharmaceutical Society of Nigeria (PSN), Mr. Sam Ohuabunwa, Tuesday lauded the Central Bank of Nigeria (CBN) for the N100 billion intervention fund with single digit interest rate for manufacturers in the country as palliatives over the Coronavirus pandemic.
But PSN identified inflation and difficulty in sourcing foreign exchange needed to import raw materials for local production in the country as among the challenges of the beneficiaries.
Ohuabunwa said the loan would go a long way in boosting the capacity of manufacturers in the country, adding that this would have been difficult to raise from commercial banks.
Speaking on the occasion of a capacity building forum organised by the Financial Correspondent Association of Nigeria (FICAN) in Lagos, he said the fund would assist to either build or complete new plants, acquire new machinery that will help in production.
He said all this will lead to expansion of the manufacturing sector and add value.
According to him, manufacturers have already started to apply the funds to improve on their businesses.
He told newsmen, “It is something we have prayed for. It is something that we have cried for. It is something that we have advocated and made case for many years ago that we needed special funding. We have even demanded the Pharmaceutical Industry Bank. So, we are happy that at last, thanks to COVID-19, that the federal government through the CBN has eventually come to our aid. For us the N100 billion was a major response from the government through the CBN.
“I am aware that many of those who applied in the first tier have received approvals and have accessed the funds through their corresponding commercial banks.
“A couple of them have started to apply them to affect what they needed it for capacity building, or building or starting new plants. Getting new equipment and starting new processes to expand their manufacturing and increasing add on and value addition. This shut in the arm from the CBN is supposed to boost that and we are eager to see it happen.”
Ohuabunwa however expressed concerns over the scarcity of foreign exchange, adding that it has become an issue in utilising the loan from the CBN.
He also added that another issue was the effect of inflation on the loan and depreciating naira exchange rate for foreign ecange as among the challenges for beneficiaries of the loan to pay back.
According to him, those who benefited from the loan have issues converting the money into raw materials as a result of shortage of foreign exchange.
“Many of them are running the risk of losing a substantial value of this money to inflation and high level of depreciation of the Naira in the foreign exchange market and are being constrained to shop for foreign exchange from the parallel market.”, he said.
He added, “This is a special project and the CBN should not allow the firms to go through the torture of begging commercial banks or looking for where to scratch out foreign exchange.
Ohuabunwa added that his PSN has been assured verbally that the CBN would address the problem of manufacturers on this.
He said, “We appeal to CBN to make a special allocation to beneficiaries of this fund to be able to import inputs. We have only received their verbal assurance to do something. We will also, be asking for the extension of the moratorium from one year to two years and reducing the rate which is still reasonable at single digit.” .
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