CBN restates support for manufacturing firms, defends push for import substitution

The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has restated the Bank’s resolve to encourage firms willing to invest in the Nigerian manufacturing sector in order to grow the economy.

Mr. Emefiele made the pledge in Lagos on Friday, March 5, 2021, while hosting the signing of the Memorandum of Understanding (MOU) between Procter & Gamble (P&G) and Colori for the local production of its Oral Care products, Oral B, as part of efforts towards localization of production in Nigeria. The partnership represents a new investment of $35Million dollars.

According to him, the manufacturing industry in Nigeria remained a key focus of the efforts by the monetary and fiscal authorities towards driving recovery of the Nigerian economy, following the downturn due to the impact of the COVID-19 pandemic, hence the push for import substitution.

To match its words with action, he said the CBN set up a N1 trillion facility in April 2020, aimed at supporting growth and expansion of manufacturing firms in Nigeria. He disclosed that close to N300bn of the amount had so far been disbursed to 76 manufacturing firms, which would boost local manufacturing across critical sectors over the next few years.

“Our efforts have aided the recovery of the manufacturing sector as reflected in the Purchasing Managers Index which shows that the index on manufacturing activities rose from a low of 41 points in May 2020 to 49.6 points in December 2020,” Emefiele added.

While admitting that growth remained fragile, the CBN Governor noted that driving further growth of the economy would require that the Bank and the fiscal authorities continue to support more investments that will enable the growth of the manufacturing sector in Nigeria.

Emefiele therefore encouraged multinational firms to emulate Procter and Gamble by considering the opportunities that Nigeria offers and begin to set up their manufacturing lines in Nigeria. He also expressed belief that this move would help to enable the country build a more resilient economy that creates jobs and supports skills transfers for the nation’s growing and youthful population.

Given the size of the Nigerian population and market, he asserted that Nigeria offered significant advantages for multinational manufacturing firms that choose to invest in domesticating their productions lines in Nigeria.

“Rather than import goods that can be produced in Nigeria, companies should invest in Nigeria,” he charged, adding that “We can’t afford to continue to rely on a model that encourages imports of goods and exports of jobs away from Nigeria, as the ramifications will be huge on our economy.”

In their separate remarks, the P&G Managing Director for Nigeria, Mr. Adil Farhat and the Managing Director of Colori Cosmetics Nigeria, David Feng, commended the CBN and the Governor for being a champion of localisation.

Mr. Farhat assured that P&G will continue to partner with the Nigerian government as the company increases its economic and social footprint, in support of the diversification and localisation objectives of Nigeria.

Feng, on the other hand, said the company aimed at working with local businesses to provide a healthier lifestyle for the Nigerian population.