Manufacturers in the country have decried the escalation in the Consumer Price Index (CPI), continuous erosion in the Naira value and difficulty in accessing forex, and the consequences of the lingering Russian-Ukrainian war, which they said adversely affected their confidence which dipped 0.9 points in the first quarter of 2023.
The manufacturers who also complained of the high cost of energy, exorbitant taxes, high lending rates, and persisting insecurity are extremely groaning in pain due to these issues that are frustrating their contribution to the economy.
These are contained in the latest Manufacturers Confidence Index (MCCI) report of the sector which showed that the Aggregate Index Score of the MCCI declined to 54.1 points in the first quarter of 2023 from 55.0 points obtained in the fourth quarter of 2022. The index score of the current quarter though below that of the previous quarter, indicates that manufacturers generally show resilience and have confidence in the economy.
According to the report by the Manufacturers Association of Nigeria (MAN) which measures changes in the sector’s activities in relation to government policies, sectoral groups such as Electrical & Electronics and Motor Vehicle & Miscellaneous Assembly scores of 49.7 and 48.6 exhibited gross loss of confidence as they fell below the 50-point benchmark. These sectoral groups, according to the report were adversely affected by erratic electricity supply and instability of macroeconomic indicators that significantly worsened their sales performance.
Similarly, among industrial zones, activities in Kaduna (49.5 points), Abuja (48.6 points), Rivers/Bayelsa (46.2 points) and Cross-Rivers/Akwa-Ibom (43.9 points) were depressed by the high cost of the operating environment in the first quarter of 2023 as underlined by their index scores which fell below the benchmark points.
Sequel to the above trends, MAN urges the Government to strive to ensure the harmonization of fiscal and monetary policies that will pave the way for a stable macroeconomic environment needed to promote productivity in the manufacturing sector and improve the ease of doing business.
To allay the manufacturing sector of the aforementioned hiccups, MAN is asking the Bola Tinubu administration to improve forex availability by prioritising forex intervention through the official market, particularly to support the raw materials and machine needs of the industries; and also, improve forex allocation to the industrial sector and enhance the capacity of designated banks to efficiently process application of forex by manufacturers.
The association also seeks an improvement of the electricity supply to the manufacturing industry by committing to upscaling electricity generation by at least 10,000MW as Egypt did in two years, encouraging further investment in the electricity value chain, generation, transmission, and distribution, sustaining the eligible customer initiative to improve electricity supply to the manufacturing sector and also embrace and support significant development of energy mix and renewables like solar and wind energy sources.
Other demands of the operators include improving electricity supply to the industries by rehabilitating the four national refineries to resume domestic refining of crude oil into Premium Motor Spirit, Kerosene, and diesel, reducing the number of taxes payable by industries, improving the availability of local raw materials, improving access to credit by industries and stabilising the macroeconomy
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