‘Nigeria’s manufacturing sector still struggling to survive’
Despite the ability to take millions of people out of poverty by way of providing employment opportunities while also creating wealth, the President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, has said the nation’s manufacturing sector is gasping for breath.
According to its quarterly research, aggregate Manufacturers CEOs Confidence Index (MCCI) shows that the confidence oscillated under the 50 neutral points: 44.4 points in Q1; 40.2 points in Q2: 43.3 points in Q3; and then 42.06 in Q4 2020, noting that the trend is a strong indication of manufacturers’ lack of confidence in the economy in 2020.
Ahmed, at the 2021 presidential media luncheon, yesterday, said significant among the challenges faced by manufacturers are difficulty in accessing foreign exchange (forex) to procure raw materials not locally available; high cost of electricity/power; and high cost of transportation. Others are low demand for commodity; difficulty in accessing funds; regulatory issues from numerous regulatory agencies; poor port administration and unavailability of raw materials; policy somersaults, but to mention a few.
He noted that the implication of these challenges impedes the growth and development of the manufacturing sector, thereby affecting the attainment of the sector’s full potential for massive job and wealth creation.
He however commended the government on the decision to reopen the land borders for ease of trade engagements particularly under the implementation phase of the African Continental Free Trade Area (AfCFTA). He said the trade pact has the potential to build Africa’s capacity to manufacture and change the narrative of African economy and give Africa a stronger voice and positioning in the global economy.
“More so, I am confident that there will be a tremendous opportunity for growth and development for each and every one if the countries that signed this agreement are willing to come together to make it a success. But this cannot come without challenges,” he added.
He explained further that a possible challenge that stares manufacturers in the face is dumping, advising that to prevent it, there is need to ensure that all countries operate based on the rule of origin that has been agreed.
In his words, “The difference is that while some countries will ensure that these regulations are complied with, others unfortunately will not do so. This calls for an effective monitoring mechanism to be put in place to ensure that all countries do the right thing.”
He said MAN had conducted a series of webinar workshops for its members to get them fully prepared to take advantage of the opportunities that are embedded in the agreement; hoping that the Nigerian government would play its part to put adequate measures in place for a beneficial trade agreement.
Going forward, he said it is imperative that the management of the macro economy is approached more pragmatically and the development of the productive capacities of the nation is intentionally enhanced.