High inflation, forex challenges to slow manufacturing sector till mid-2024 – MAN

Manufacturer Association of Nigeria (MAN) has said that high inflation and foreign exchange challenges are likely to continue to affect the performance of the manufacturing sector in the country till the mid -year 2024.

The Association in its manufacturing sector Outlook for 2024 said “Average capacity utilization 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.

In its outlook projection the association said “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.”

Urging the federal government to take decisive action to address key issues affecting the manufacturing landscape, the association expressed the need for the government to incentivize investment in renewables to enhance electricity generation and promote energy-cost efficiency

The top on the list to be addressed by the government according to MAN is an overhauling of the power sector and prioritization of forex and credit allocation to manufacturers, essential steps to drive growth in Nigeria’s industrial sector.

In addition, 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.

The association proposed that the government to 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.

In order to revitalize the sector, MAN expressed the need of mandatorily increasing the patronage of made-in-Nigeria products and urged the government to lead by example, by prioritizing the purchase of domestically produced goods for all government contracts and projects, in line with Executive Order 003.