“To this end, Manufacturers Association of Nigeria (MAN) believes that in addition to current efforts Government should act on the following to improve the performance of the manufacturing sector in Nigeria: “
That’s the reaction of the body to the latest report of NBS, the country’s statistics body to the performance of the Manufacturing Sector standing at 0.81% for Q1 2019 fell by 2.59 percentage point when compared with 3.4% of Q1 2018 and by 1.54 percentage points when compared with 2.35% of Q4 2018.
MAN said that the performance of the Sector in the first quarter of 2019 was largely predicted by the Manufacturers CEOs Confidence Index (MCCI) report of the Association which showed the picture of a sector with dwindling performance.
“The CEOs of manufacturing concerns expressed an uninspiring confidence on the economy (51.3 points which is slightly above the minimum benchmark performance of 50 points).
“Hence, the Government needs to pay more attention to the challenges hindering optimum utilization of the capacity in the sector and the economy at large.
“The challenge of inadequate electricity supply persisted and made worse by the steadily high electricity price. Inadequate electricity supply remains a major driver of the cost of production, as it constitutes between 30% to 40% of the cost of production.
“This is not manufacturing friendly and does not support competitiveness as in addition to other challenges hindering production efficiency in the sector ranging from overregulation, multiple taxation, dilapidated port infrastructure and low purchasing power of the citizenry due to high inflation amongst others.”
8 Things Government should Do
It said that government should :
i. Continue to improve on the power supply and the general upgrade of the nation’s infrastructure;
ii. Resolve the grid lock around the Lagos Ports and repair and expand the road and expand the roads leading to Ports;
iii. Pay particular attention to the development of railways around the national ports.
iv. Make other ports outside Lagos functional so as to address the gridlock challenges and the associated cost;
v. Make FX more available for purchase of manufacturing inputs that are not locally available/ convergence of the existing FOREX windows;
vi. Ensure compliance of the tiers of Government to the regulation on Harmonized taxes so that only the approved ones are implemented;
vii. Entrench better monetary policy management to reduce the currently high inflation in the economy;
viii. Ensure conscientious implementation, monitoring and performance evaluation of Executive Orders 003 for improved patronage of locally produced goods by MDAs.