The Association of Food, Beverages and Tobacco Employers (AFBTE) has raised alarm over the detrimental impact of Nigeria’s harsh economic climate on the food and beverage industry. During their 45th Annual General Meeting in Lagos, the association’s President, Chinedum Okereke, highlighted the challenges faced by businesses due to recent government policies.
Okereke pointed to the abrupt removal of fuel subsidies and the floating of the naira as key factors contributing to significant foreign exchange losses, negative capital for many businesses, and a decline in investor confidence. These developments have led to reduced foreign investment, business closures, and the departure of some multinational companies from Nigeria.
While international institutions like the International Monetary Fund and World Bank advocate for the long-term benefits of these policies, the AFBTE president noted that the sudden implementation has had immediate negative consequences. The devaluation of the naira has resulted in soaring production costs, reduced sales volumes, job losses, and an increase in the production and consumption of substandard goods, posing health risks to consumers.
Furthermore, the government’s efforts to increase revenue through increased taxes and levies have further exacerbated the escalating operating costs for businesses in the sector. The Central Bank of Nigeria’s recent interest rate hikes have also made borrowing prohibitively expensive.
Okereke criticized the lack of stakeholder engagement before imposing these measures, adding to the frustration of businesses struggling to navigate the challenging economic landscape.
