The Manufacturers Association of Nigeria (MAN) says manufacturing activities in the country in second quarter of 2023 was adversely affected by many negative economic variables including; escalation in the Consumer Price Index (CPI), continuous erosion in Naira value…
Difficulty in accessing forex, high cost of energy, naira crunch, exorbitant taxes, high lending rates, persistent, insecurity, domino effects of the lingering Russian-Ukrainian war and slow recovery from the cash crisis.
MAN noted in the second quarter MCCI report that “Manufacturers are extremely groaning in pain due to these issues that are frustrating their contribution to the economy.”
According to the report, aggregate Index Score (AIS) of MCCI declined to 52.7 points in the second quarter of 2023 from 54.1 points obtained in the first quarter of 2023.
The index score of the current quarter, though below that of the previous quarter, indicates that manufacturers generally show resilience and retain confidence in the economy.
However, across sectoral groups, operators in Motor Vehicle & Miscellaneous Assembly with an index score of 46.7 exhibited further loss of confidence as they fell below the 50-point benchmark.
These operators were adversely affected by the exorbitant new premium rate for motor insurance and the abrupt subsidy removal which significantly worsened sales performance and increased the consumers preference for fairly used vehicles as a result of low purchasing power.
Similarly, among industrial zones, activities in Abuja, Rivers/Bayelsa, Cross-Rivers/Akwa-Ibom, Kano, Kaduna and Oyo/Ondo/Ekiti/Osun were depressed by the high-cost operating environment in the second quarter of 2023 as underlined by their index scores which fell below the benchmark points.
Following the above trends, MAN said it is highly expedient that the Government strives to ensure the harmonization of fiscal and monetary policies that will pave the way for a stable macroeconomic environment needed to promote productivity in the manufacturing sector and improve the ease of doing business.
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