The Manufacturers Association of Nigeria (MAN) has predicted a tough year, especially the first two quarters, for the nation’s manufacturing sector, but expressed the hope of some ‘ measured improvements’ towards the end of the year.
The association, in a statement issued by its Director General, Segun Ajayi-Kadir, recently, noted that just like in other parts of the globe, the fortune of manufacturing sector in Nigeria has continued to decline, with the sector’s growth rate nose-diving to 0.48 percent in Q3 2023 as against 2.4 in 2021, due to key macroeconomic variables and externalities.
It, however, hinged the sector’s hope of recovery from the second half of the year on ‘envisaged policy reforms’, improved commitment to domestic production and general positive outlook that seems favourable for the sector.
The envisaged recovery, the association stated, will be dependent on the deployment of policy stimulus supported with a synthesis of domestic growth driven, export focused and offensive trade strategies that will promote resilience, steady growth and ensure that the sector gains meaningful traction in the later part of the year.
Giving its projections for the sector in 2024, MAN expressed the hope that the government will see the manufacturing sector as the key driver of sustained economic growth, and will, therefore, give the sector the priority that it deserves.
It also predicted a sectoral real growth of 3.2 percent; with contribution to the economy most likely exceeding 10 percent, and the Manufacturers’ CEOs Confidence Index is predicted to rise above 55 points thresholds by the end of Q4 2023.
“Average capacity utilisation will still hover around the 50 percent 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,” it stated.
MAN also predicted a higher manufacturing output from the beginning of the third quarter of the year, as the government disburses capital provisions of the budget to abandoned, ongoing and new capital projects with expected special preference for locally made products.
The association also believes the ongoing concessions of seaports, airports and roads will provide opportunities for the cement sub-sector, and contribute to infrastructure upgrade needed to enhance manufacturing productivity.
According to the association, the ongoing tax reforms and the envisaged bank recapitalisation will frontally address the challenges of multiple taxation and poor access to credit that have continued to limit manufacturing sector performance, if successfully implemented.
READ ALSO FROM NIGERIAN TRIBUNE
and then