N166.3bn Losses: 6 Manufacturers Suffer in 9 Months

Six Nigerian manufacturing companies released their nine-month financial reports for the period ending September 31, 2023, revealing a cumulative loss of N166.3 billion.

The industrial sector’s operations have been adversely affected by rising interest rates and the depreciation of the naira, resulting in higher operating costs for multinational corporations whose primary expenses, such as financing costs, are expressed in foreign currencies.

The monetary policy rate was raised by the Central Bank of Nigeria (CBN) in July for the eighth time in a row, further straining the margins of fast-moving consumer goods (FMCG) companies already facing double-digit inflation rates and low consumer purchasing power.

The difficulties faced by FMCG companies grew exacerbated as a result of the FX devaluation. For instance, Nigerian Breweries’ net loss during the period was caused by a combination of rising borrowing costs and foreign exchange losses stemming from the naira’s devaluation.

Nigeria’s development financial institutions, including the Nigeria Export-Import Bank (NEXIM), Bank of Agriculture, and Development Bank of Nigeria (BOI), are severely undercapitalized and unable to support the country’s citizens.