Lagos, Feb. 19, 2025 – The Manufacturers Association of Nigeria (MAN) has called for urgent government’s intervention to enable the sector survive its current challenges.
It said that the sector could collapse without urgent government’s intervention, while the future of the country also hanged in the balance.
Segun Ajayi-Kadir, its President, made the call while unveiling Q4 2024 Manufacturers CEO Confidence Index (MCCI) Report on Monday.
The index is a measure of changes in the manufacturing activities due to government’s policies.
Ajayi-Kadir said the report revealed that capacity utilisation declined by 0.8 per cent in Q4 2024, while manufacturing investment dropped by 1.2 per cent.
Employment in the sector also fell by 0.7 per cent, although the contraction was lower than the 3.5 per cent recorded in Q3 2024.
He said the cost of shipment rose by 11.6 per cent in Q4 2024 from the 17 per cent increase recorded in Q3 2024.
“A close observation of the analysis indicates that only the sales volume recorded a favourable change during the period of review.
“The analysis generally reveals that the adverse effects of the prevailing macroeconomic reforms are diminishing as production and distribution costs, capacity utilisation, volume of production, investment, employment, and cost of shipment recorded lower adverse changes compared to the previous quarter,” he said.
The report identified high energy costs, forex scarcity, multiple taxation, and poor infrastructure as the biggest threats to their survival.
It also highlighted high electricity tariffs and the cost of alternative energy remained a major burden on production.
According to the report, “Manufacturing operations were directly stalled by the lingering effects of high raw material costs, energy, and logistics, as the existence of high exchange rates, interest rates, and inflation rates remain unfavourable to the overall business environment,”
In spite the tough conditions in the sector during the period, the MCCI rose slightly by 0.5 points to 50.7 points in Q4 from 50.2 points in Q3, reflecting marginal optimism among the industry players.
However, its projections for the first quarter of 2025 show a downward trend.
The anticipated business condition dropped from 56 points to 53.2 points, while the projected employment condition slid to 53 points.
The anticipated production level also fell from 54.3 to 54 points, indicating manufacturers’ fears of further economic downturns.
To check the challenges, MAN advised the federal government t suspend further electricity tariff hikes, stop intersect rate hikes, direct banks to offer manufacturers single-digit loans, and expand the Bank of Industry’s capital base to improve access to industrial credit.
The association also called for the clearance of the outstanding $2.4 billion foreign exchange forward contract to restore confidence in the currency market, halting the 15 per cent increase in port charges and facilitating the implementation of the National Single Window project to reduce trade costs. (GBN)
