According to the Manufacturers Association of Nigeria (MAN), Nigeria’s performance will be constrained until mid-2024 due to the nation’s high inflation and currency problems.
This was stated by the Association in its “Manufacturing Sector Outlook for 2024,” which also noted that because of issues with foreign exchange and the current high rate of inflation, average capacity utilization is predicted to hover around 50%, with a possible uptick only expected in the third quarter as these issues resolve.
It said: “Average capacity utilization will still hover around the 50% threshold as the forex-related challenges and high inflation rate limiting manufacturing performance may linger until mid-year.
“The sector may experience a meagre improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter.”
MAN’s Plea for Government Intervention
The manufacturers also urged the federal government to take decisive action to address key issues affecting the manufacturing landscape.
Topping the list is a call for an overhaul of the power sector and prioritization of forex and credit allocation to manufacturers, essential steps to drive growth in Nigeria’s industrial sector.
The association stressed the need for the government to incentivize investment in renewables to enhance electricity generation and promote energy-cost efficiency.
Additionally, MAN recommended prioritizing forex and credit allocation to manufacturers while streamlining the number of Bureau De Change operators to curb excesses through effective management and supervision.
Utilising Savings from Fuel Subsidy Removal
MAN proposed that the government deploy cost savings from the removal of fuel subsidies to implement a range of production-focused policies.
The policies, coupled with structural measures, should combat inflationary pressures arising from insecurity, energy costs, and transportation.
To revitalise the sector, MAN also emphasised the importance of mandatorily increasing the patronage of made-in-Nigeria products. The association called on the government to lead by example, prioritising the purchase of domestically produced goods for all government contracts and projects, in line with Executive Order 003
