Forex scarcity: Erisco Foods threatens to quit Nigeria, sacks 1,500

An indigenous firm, Erisco Foods, has said it may be forced to shut down its production in the country due to its inability to access foreign exchange from the Central Bank of Nigeria for the procurement of machinery

The company’s Chief Executive, Mr. Eric Umeofia, said it would lay off 1,500 employees and quit Nigeria for a more favourable business environment if things don’t change.

He said this in Lagos on Wednesday when some of the company’s workers held a protest, lamenting plans by the company to halt operations and lay off workers.

Umeofia said, “It is difficult for indigenous manufacturers to access forex despite CBN’s promise to manufacturers that they will allocate 60 per cent of foreign exchange to them.

He said that the high interest rates charged by commercial banks, importation as well as policy constraints were disincentives to manufacturer’s production in the country. “The prices of our products are high due to high cost of production and this is in addition that we currently generate our own power.”

Umeofia complained that the penchant of Nigerians for imported goods and lack of clear policy against importation of goods that could be manufactured locally were destroying manufacturers.

“We will be forced against our patriotic wish to relocate our operations to a country where there is conducive and favourable environment for manufacturing if within 30 days from now nothing significant is done by the government to address these issues.

Erisco Foods has a production capacity of 450,000 metric tons of tomato paste annually for 22 brands with over 2,000 workers.

The company’s workers had in their hundreds held a peaceful protest against the management’s plan to shut its production worth about $150m.

The workers were seen carrying placards and chanting songs around the factory premises in Oregun, Lagos.

The Area Sales Manager, Erisco Foods, Mr. Ayoola Oladayo, urged the Federal Government to save their jobs by intervening in the situation of the company. “The unemployment rate is alarming and we do not want to be classified as jobless in this harsh economic situation of the country.”

“We urge the government to assist Erisco Foods and other indigenous manufacturers to continue to contribute to the country’s GDP.”