Nigeria’s food and beverage industry is facing one of its toughest periods in recent years, with rising production costs, foreign exchange volatility and harsh economic conditions forcing manufacturers to downsize operations and lay off workers.
The Food, Beverage and Tobacco Senior Staff Association (FOBTOB) has warned that the sector is approaching a breaking point, saying urgent government intervention is needed to prevent further job losses and possible business closures.
Speaking on the sidelines of the 114th Session of the International Labour Conference in Geneva, FOBTOB President, Oyibo Jimoh, said Nigeria’s food industry remains heavily dependent on imported raw materials, making manufacturers vulnerable to exchange rate fluctuations and soaring operating costs.
According to Jimoh, the worsening foreign exchange crisis has significantly increased the cost of doing business, forcing many companies to restructure and reduce their workforce in order to survive.
Most companies in the sector rely on imported raw materials, and exchange rate instability is hitting businesses harder. Companies are reviewing their operations and staff strength to stay afloat,” he said.
The labour leader disclosed that many workers have already lost their jobs and warned that more layoffs could follow if the current economic situation persists.
FOBTOB also expressed concern over government restrictions on sachet products and beverages packaged below 200 millilitres, describing the policy as a major threat to a vital segment of the food and beverage industry.
Jimoh noted that small package sizes remain the preferred option for millions of Nigerians whose purchasing power has been eroded by inflation and rising living costs.
Not everybody can afford larger packs. Smaller sizes are the cash cow of the industry. If the policy continues, that sub-sector may collapse,” he warned.
Beyond the forex crisis, manufacturers are also struggling with poor road networks, unstable electricity supply and declining consumer demand.
The economy is difficult for businesses. Roads, energy costs and weak purchasing power are major challenges confronting companies, especially in the food sector,” Jimoh stated.
Industry players say these challenges have increased production expenses and reduced profitability, pushing many firms to cut costs and reduce staff numbers
The FOBTOB president also argued that the current N70,000 national minimum wage is inadequate considering Nigeria’s rising cost of living.
There is no amount that can truly quantify labour, but in this economy, N70,000 cannot go anywhere,he lamented.
He urged employers to improve workers’ salaries where possible while balancing wage increases with the economic realities facing businesses and investors.
Jimoh advised workers to embrace continuous training and acquire new skills to remain competitive in an increasingly technology-driven workplace.
He revealed that the union would continue organizing capacity-building programmes and career development initiatives aimed at helping workers adapt to changing industry realities.
With inflation, forex scarcity, weak consumer spending and rising operating costs squeezing manufacturers, stakeholders fear Nigeria’s food and beverage industry could face deeper disruptions if urgent policy measures are not introduced.
Analysts warn that without reforms to stabilize the exchange rate, improve infrastructure and support local production, more companies may shut down, leading to higher unemployment and increased pressure on the economy.
