How Nestle, Flour Mills, Others Got $660m CBN FX Allocation

The Central Bank of Nigeria (CBN) has listed a total of 1,342 manufacturers, power, trading and firms operating in other sectors that got foreign exchange (FX) through its recent intervention.

In all, a total of $660,173,976 million were sold to the firms through FX forwards to their respective bank for onward sales to the operators.

The move by the Central Bank of Nigeria (CBN) was in line with its earlier promise to ease the FX pressure on manufacturing and agricultural businesses through forward sales under the flexible FX regime.
The central bank stated this in a publication titled: “FX Utilisation for Banks for September 2016,” obtained on its website at the weekend. The FX was for procurement of raw materials, plants and machinery by manufacturers and other real sector operators.

The report showed that  Nestle Nigeria got $323,434; Dana Motors got $12,877,278.81; CFAO Motors -$53,133.38; Flour Mills – $2,360,500; Jubaili Brothers – $271,704;  Nigerian Breweries -$6,240,000; Ok Foods Limited – $889,699; Fouani Nigeria Limited – $39,253.73; Glaxosmithkline Consumer Plc – $1,202,391; Friesland Campina WAMCO – $3,097,973, and Honda Automobile – $552,028.22

Others were A-Z Petroleum Products Limited which bought -$12,962,425.04, through the FX auction; Rahamaniya Oil & Gas – $19,220,000;  Dag Motorcycles Industries Nigeria -$27,964,123;  Seven-Up Bottling Company Limited -$5,882,293.67; Lafarge Africa Plc -$36,634.52; Mikano International Limited- $439,746.04 and MTN Nigeria- $1,285,857
Furthermore,  Biswal Limited got $6,779,858.11, HIS Nigeria Limited -$10,006,405.57; IPI Power Tech -$7,405,595.55, Promasidor Nigeria Limited -$2,100,000, Saba Steel Industries Limited -$11,147,478.58;  Crown Flour -$10,254,558; African Foundries Limited -$4,020,679.36;  Parco Enterprises Limited -$6,558,320; Prime Plastochem Nigeria Limited -$5,668,012.75; and Matrix Energy Limited ($14,872,223.91).

Uniliver Nigeria, Stallion, Deli Foods, Honeywell Flour Mills, De United Foods, were also among the firms that got the FX.
The CBN acting Director, Corporate Communications Department, Mr. Isaac Okorafor, had explained that the CBN was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit (LCs) to import the required materials for their businesses.

Citing the case of some manufacturing industries in Nigeria, which had posted huge turnovers since the CBN introduced restrictions on the sourcing of FOREX for 41 items from the inter-bank market, Okorafor had insisted the restriction had indeed yielded positive results.

He therefore urged manufacturers to take advantage of the policy, which he stressed was part of efforts by the CBN to ensure that Nigeria reclaims its status as a major producer through backward integration initiatives and conserve billions of FX spent on import bills annually.
The Chairman of Sosaco Nigeria Limited, the makers of the popular Gino tomato paste brand, Mr. Francis Ogboro, recently told THISDAY that there was a significant improvement in dollar supply in the country, pointing at the recent policies by the CBN.

Ogboro, who noted that although the FX situation was still far from what manufacturers in the country would want, he admitted that the situation had improved considerably from what obtained a few months ago.

“We are encouraged by the recent improvement in FX supply. It has improved from the stagnant situation that used to be the case in the past. One of my companies just succeeded in procuring FX from the 90-day auction and that took a lot of pressure off our operation and has helped us to keep our machines running and our people employed.
“The CBN policy, which mandates the allocation of 60 per cent of available FX to manufacturers, I believe, has helped to improve the situation,” he added.

by By Obinna Chima/Thisday