The Manufacturers Association of Nigeria, MAN, has challenged the present administration to make foreign exchange available as its short supply has stifled production along side epileptic power supply.
The Association made the demand in its Manufacturers CEO Confidence Index (MCCI) for Q1 2023, where it noted that operators are extremely groaning in pain due to issues militating against their contribution to the economy.
To allay the sector of the hiccups, MAN also demanded reduction in the number of taxes; availability of local raw materials; access to credit and stabilising the macroeconomy.”
The index further revealed that the aggregate MCCI declined to 54.1 points in Q1 from 55.0 points in the previous quarter. Major performance indicators of the manufacturing sector all recorded unfavourable changes, the index revealed.
“Amidst the harsh business-operating environment evidenced by poor macroeconomic indices, the underperformance was largely driven by the nationwide cash crunch in the first quarter of the year,” it said.
It said the economic turmoil significantly crushed consumer patronage and disrupted the manufacturing value chain in most periods of the quarter.
“Although the quarter recorded marginal contraction in the index score, the untoward hardship meted on manufacturers is growing and diminishing the resilience of the sector,” it added.
The MAN, further lamented that production and distribution costs of its members escalated by 24 per cent in the first quarter, much higher than the 19 per cent raise recorded in the preceding quarter.
The issues identified as contributory factors to the low performance were listed to include high inflation, continuous erosion in naira value and difficulty in accessing forex, high energy cost, naira crunch, exorbitant taxes, high lending rates, persisting insecurity and the impact of Russian-Ukrainian war.
It was revealed in the MCCI that the volume of production contracted by 13 per cent in the quarter under review against the one percent growth recorded in the previous quarter.
“Manufacturing investment dropped by three percent from two percent increase.” They added that sales volume plummeted by 13 per cent against the stable record witnessed in the preceding quarter and cost of shipment rose by 20 per cent though witnessed a slowdown from the 22 per cent increase recorded in Q4.
The Association recommended that tackling the challenges of the manufacturing sector must be at the front burner of the new administration.
“The president must exhibit his articulate reasoning and compassion to act differently by hitting the ground running with a value system that can rescue manufacturers from these infliction,” it said.
