Nigeria @ 65: Manufacturers highlight major pain points

By Yinka Kolawole

At the backdrop of Nigeria’s 65th independency day celebrations, manufacturers successful the state person lamented their dwindling fortunes occasioned by precocious involvement rates, vigor costs, regulatory uncertainties and infrastructure deficits, among different binding constraints.

Available statistic bespeak a declining inclination successful the manufacturing sector’s publication to the nation’s Gross Domestic Product (GDP). For instance, information from the National Bureau of Statistics (NBS) shows that the sector’s publication to the system successful 2020 stood astatine 8.99 percent; 8.99 percent successful 2021; 8.91 percent successful 2022; 8.64 percent successful 2023; and 8.41 percent successful 2024.

The information besides shows that mean yearly maturation complaint of the manufacturing assemblage betwixt 2019 and 2024 is antagonistic astatine -0.76 percent, which means that Nigeria’s manufacturing assemblage has been shrinking successful existent presumption implicit the past 5 years.  

The manufacturers person attributed the dwindling fortunes to galore of the challenges they person had to conflict implicit the years successful bid to enactment afloat. These, they noted, see vigor outgo escalations, unstable powerfulness supply, import dependency for captious inputs, volatility successful the Naira, and rising involvement rates, aggregate taxation, logistics and insecurity, among others.

They besides noted that precocious ostentation rates person eroded purchasing powerfulness starring user request lags, and rising inventory levels which uncover mismatches betwixt proviso and what the marketplace tin absorb.

Speaking to Vanguard, Director General of the Manufacturers  Association of Nigeria (MAN), Segun Ajayi-Kadir, said: “Manufacturers person endured precocious borrowing costs driven by an assertive tightening argumentation stance of the Central Bank of Nigeria (CBN). The concern has spot the manufacturing assemblage astatine a competitory disadvantage against different countries of the world.

“Also, unstable powerfulness supply, precocious infrastructure gaps, erratic authorities policies person continued to undermine businesslike accumulation and competitiveness.”

Ajayi-Kadir expressed optimism that the caller 50 ground points simplification successful MPR by the apex slope volition pave the mode for deeper cuts successful lending rates to boost the struggling manufacturing assemblage successful the country.

“With caller reforms moderating inflation, stabilizing the speech rate, and improving capitalist confidence, the timing is close for CBN to gradually unbend rates.

“We are decidedly looking guardant to further reduction. If you springiness a shaper thing much than 5% to wage arsenic interest, competitiveness is compromised, arsenic our rivals are borrowing astatine overmuch little rates. You are not going to get thing retired of it due to the fact that those with whom you vie are not borrowing astatine that rate,” helium stated.

Ajayi-Kadir besides reiterated the request for a peculiar financing model for manufacturers to alteration them entree loans astatine rates beneath the MPR.  

“Such a concession is pivotal for driving concern growth. CBN person to marque an intentional determination to make conditions that marque commercialized banks much consenting to lend to manufacturers and frankincense lend importantly to economical growth,” helium stated.

On his part, Sunday Okpe, Executive Secretary of the Apapa Branch of MAN, said: “The astir challenging contented close present is Customs related, ranging from strategy failure, with “B’Odogwu” incapable to measurement into Nigeria Integrated Customs Information System (NICIS) shoes, resulting successful immense demurrage for manufacturers. This is successful summation to unfriendly policies from each authorities agencies, aggregate taxation and tons more.”

NICIS is simply a computerized strategy utilized by the Nigeria Customs Service for harmonizing customs procedures, meant to facilitate trade, Customs clearance, and absorption done a azygous model system.  

In the aforesaid vein, Chairman, Export Group of MAN (MANEG), Odiri Erewa-Meggison, said, “Manufacturing exporters person faced declining competitiveness successful the planetary marketplace owed to precocious speech rates, vigor costs, aggregate levies, larboard congestion, and infrastructure shortages. We impulse the Federal Government to revisit policies designed to assistance manufacturers and to betterment the export enlargement framework.”

Also commenting, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, highlighted the continued unit of precocious accumulation costs, logistics i...