The decision of the Federal government to remove fuel subsidy, and float the nation’s currency seemed to have taken a huge toll on the nation’s manufacturing, in Year 2023.
A recent report by the Manufacturers Association of Nigeria (MAN) revealed that the sector could only generate a total of 10,133 jobs, in 2023, as against 16,300 jobs it generated in 2022, representing a decline of 37.83 percent.
The association’s 2023 report, released by its Director General, Mr. Segun Ajayi-Kadir,at its 52nd Annual General Meeting (AGM), also saw the unsold inventory of finished products reach a whopping sum of N1.14Trillion, in the year, marking a N671.69billion or 143.02 percent increase, compared with N469.64billion recorded in 2022.
More worrisome was the production value of the sector for fiscal Year 2023, which dipped to N2.57Trillion, revealing N31.36billion or 1.20percent reduction from the N2 61Trilion of 2022, a development the report attributed to the usual uncertainties surrounding the 2023 general elections, the backlash of Naira design and general disruption in economic activities.
While the report acknowledged that the sector witnessed an investment growth of 32.56 percent, from N105.49billion of Y2022 to N429.47billion in 2023; it however attributed the growth to the gross devaluation of the naira. This, it said, saw the exchange rate paid by manufacturers for the importation of plants surge by 60.64 percent, from N462/$ in December 2022 to an average of N1,250 in December 2023.
It, however, described the continued increase in investment spending, by manufacturers, as representing a growing level of confidence in the economy for 2024.
On some of the reforms, the report noted that: ” Although the policies of the new administration, aimed at engendering transparency in the forex markets and boosting investors’ confidence have been widely commended as a necessity for economic development, they have however exerted additional pressure on the local currency and manufacturers, with escalating ripple effects on prices”.
It also warned that the policy reforms would only yield results of enhancing growth, social inclusion and addressing insecurity, when stakeholders are duly consulted and involved in the development of strategies and actual implementation.
Speaking at the 4th Adeola Odutola, marking the end of the three-day manufacturers summit, in Lagos, the President of MAN, Otunba Francis Meshioye, expressed the belief that attaining the Federal government’s $1Trillion economy by 2030 can be realised, if the.sector is fully supported by the government.
He explained that MAN’s decision to have the theme of this year’s lecture woven around ‘The Imperatives of an Intentional Development of the Nigerian Manufacturing Sector’, was informed by the need for it to advocate for a deliberate and concerted approach towards the development of the sector, in the midst of various challenges confronting it.
The MAN boss expressed regrets that the despite its huge potential of generating employment and driving the nation’s economic growth, issues such as high energy costs, frequent hike in electricity tariffs, high importation costs, inadequate transportation infrastructure and others have continued to hold down the growth of the sector.
“By developing our manufacturing capabilities and leveraging its potential, we can reduce inflation and our over dependence on imports, promote import substitution, create more jobs, boost government revenue, strengthen and improve stabilising the forex market,” he added.
and then