Food Industry on Brink as Rising Costs, Forex Crisis Trigger Mass Layoffs

The Food, Beverage and Tobacco Senior Staff Association (FOBTOB) has raised the alarm over increasing layoffs across Nigeria’s food and beverage industry, warning that urgent intervention is needed to save jobs and businesses.

Speaking with journalists on the sidelines of the 114th Session of the International Labour Conference in Geneva, FOBTOB President Oyibo Jimoh said the combined impact of rising production costs, foreign exchange volatility, weak consumer purchasing power and regulatory restrictions has placed unprecedented pressure on manufacturers.

Jimoh said the industry’s dependence on imported raw materials had made it particularly vulnerable to naira volatility and escalating production costs, forcing many companies to review their workforce and operations to survive.

He expressed concern over restrictions on sachet products and beverages packaged in containers below 200 millilitres, saying the policy had already led to job losses and could further threaten the survival of small-pack manufacturers.

Jimoh argued that smaller package sizes remain the preferred choice for many consumers whose purchasing power has been severely eroded by inflation, and that closing the sub-sector would push more Nigerians out of work.

He listed poor road infrastructure, unstable energy supply and declining consumer demand as additional pressure points, and described the current N70,000 national minimum wage as grossly inadequate given prevailing economic realities.

FOBTOB is engaging the Federal Government on a possible policy review and additional support for the sector, which is a major employer in the manufacturing value chain across the country.

Labour economists have noted that continued job losses in consumer-goods manufacturing tend to push more Nigerians into the informal economy, with knock-on effects on household income, tax revenue and consumer spending.

Sources: Vanguard