As reported by Nairametrics last week, Erisco Foods, a Nigerian company that produces tomato paste, threatened to shut down and lay off 1,500 workers as it claimed that it lacked forex to operate.
Proof that the company’s claims are false however showed as The Cable reports that the company has received N2 billion worth of forex in the last 2 years, with the latest coming in early this year. The forex was allocated to satisfy the company’s claim of ‘purchasing of a tomato processing machine’.
This negates claims by the Chief Executive Officer of Erisco, Eric Umeofia, who said last week that lack of support [in sourcing forex] from the Central Bank would lead to closure of the company.
“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. “It is unbelievable that for over two months, no forex has been allocated to Erisco Foods whereas the same forex is allocated daily for the importation of finished goods. Products that can be easily produced locally like fish head, tomato paste, razor blade are on the forex bids of the various banks.” Umeofia had said.
Rumors making the rounds however say that Erisco Foods have actually flouted some of the CBN’s instructions and guidelines and as such may be made to pay for this. A source close to the Cable was quoted as saying “I don’t want to get into the CBN-Erisco matter, but word is going round that Erisco may have been importing fresh tomatoes.”
In its response, the Central Bank of Nigeria (CBN) through its Acting Director, Corporate Communications Department, Isaac Okarafor rebuffed Erisco’s threats saying “By practice, we do not join issues with individuals on matters of this nature. All I can tell you is that the CBN does not allocate foreign exchange. All business persons, manufacturers, traders, etc. are expected to approach their respective banks to bid for and obtain foreign exchange. Whether they succeed or not is their business.”
With this development, it means that threats to shut down the company may actually be an under-handed attempt to blackmail the CBN into changing its policies and possibly sparing Erisco from punishment. Erisco is probably playing on the tense economic situation in the country, knowing that Nigerians would be alarmed to hear an indigenous company is folding up.
What Erisco’s next move will be is what Nigerians are waiting for now.