Why NECA seeks audience with CBN over Form ‘M’, others

The Nigeria Employers Consultative Association (NECA) has warned that the Central Bank of Nigeria (CBN)’s recent policy on Form ‘M’ will negatively impact the economy calling for immediate audience with the apex bank.
The employer’s body in a letter addressed to the CBN Governor, Mr. Godwin Emefiele, said it seeks an audience with the CBN office to further engage on this matter in the interest of finding a solution that will not negatively impact businesses or the economy.
The Director-General of NECA, Dr. Timothy Olawale who signed the letter though commended the Federal Government on its various policies aimed at ensuring the growth and development of the Nigerian economy, he however said it is imperative to note the downside of the Policy which has the potential to frustrate the ongoing efforts of government to return the economy to growth, create jobs and prevent an impending economic downturn already worsened by the COVID-19 pandemic.
“The exclusion of procurement companies from Form ‘M’, will cause significant business disruption for many manufacturing companies because of existing medium to long-term contractual obligations with centralized procurement agencies.
Dismantling such arrangements and contracts would not only result in losses for these companies in Nigeria, but would also disrupt production schedules which are planned long in advance. Other attendant complications on manufacturing companies include a reduction in productivity, loss in business revenues, supply chain disruption, all potentially resulting in loss of employment for many Nigerian employees,” the letter read.
The Employers body also reasoned that the policy has the potential to worsen impact of COVID-19 pandemic on the real sector.
It stated, “While we appreciate the need for Government to embark on various measures to mitigate the impact of COVID-19 including the restrictions across different sectors, a business survey conducted by NECA with a view to gauging the specific impact of the pandemic, revealed that 74.2 percent of enterprises have either stopped operating or are their lowest ebb. Furthermore, 78.2% of enterprises in Nigeria have had supply challenges which would be worsened by the elimination of centralized procurement from their value chain.”
For the successful implementation of the policy, besides the engagement with the stakeholders, NECA advised CBN
that a system is put in place to monitor, identify and penalize abusers of the nation’s foreign exchange mechanism. It added, “NECA is pleased to support the development of such systems in line with global best practice.
“In the alternative, we appeal to the CBN to convene a stakeholder engagement session with NECA and Chief Executives of our member-companies who are impacted, to arrive at a moratorium that would enable them build a relationship with the final suppliers and original equipment manufacturers over the period of moratorium.”
The Employers body said it appreciate the intention of the CBN to introduce a Product Price Verification Mechanism to forestall over-pricing, and/or mispricing of goods and services imported into the country.
“At NECA, we are committed to collaborating with the CBN in any way practicable, to ensure this objective is fully met without jeopardizing business continuity for member-companies,” it emphasized