The Manufacturers Association of Nigeria, MAN has warned that the recent floating of the naira, which has led to its devaluation, would increase raw materials import costs and reduce import flows.
The association stated this in a position document signed by its Director-General, Segun Ajayi-Kadir.
It also noted that floatation could lead to exchange rate volatility and difficulty predicting future exchange rate movements, which would make planning challenging.
Despite these challenges, MAN expressed optimism that floating the naira remained an important step towards resolving the crisis rocking Nigeria’s forex market, especially given the fact that the official exchange rate was almost at par with the market-determined rate.
According to the association, the policy will increase market efficiency and help return investors’ confidence in the economy.
Beyond forex-associated challenges, MAN noted that erratic power supply and the high cost of alternative energy sources were seriously draining the sector.
