-by our correspondent.
Many manufacturing companies in Nigeria may not reopen for productive activities by January 2021, unless the federal government takes urgent steps to address challenges militating against the growth of the sector.
The Manufacturers Association of Nigeria (MAN) gave the warning at a forum in Lagos organized by the Commerce and Industry Correspondents Association of Nigeria (CICAN). The President of MAN, Mansur Ahmed, who was represented at the occasion by the Acting Director General of MAN, Ambrose Oruche spoke on, “Effects of the COVID-19 on the Country’s Manufacturing Sector”.
He noted that despite efforts by the Central Bank of Nigeria’s (CBN) to mitigate the situation through the N1 trillion intervention funds for the real sector, a lot still needed to be done. “I want to put on record our appreciation to the CBN for its interventions, but how far could those interventions go? Many who have been able to access the N1 trillion could not buy machines for their production because of foreign exchange scarcity and you know that most of our manufacturing depends on imported raw materials, spare parts and machinery.” He said
President of MAN, Mansur Ahmed
Ahmed urged the CBN to prioritise allocation of foreign exchange to the sector as it did in 2016 and 2017 during the recession as the manufacturing sector was considered first in allocation of forex which then facilitated growth as productive activities increased.
“Why not do the same now by prioritising the allocation of foreign exchange to the manufacturing sector to enable us import needed raw materials and machinery. There is need for intentional actions from the government to create an enabling environment for investors to set up plants in Nigeria for manufacturing of industrial raw materials in a commercial quantity that can compete with the rest of the world,” Ahmed said.
He underscored the negative impact of COVID-19 on the manufacturing sector especially during the lockdown as most countries stopped shipping raw materials to Nigeria. In his words, “it will be difficult for some manufacturers to comeback after the Christmas holiday, why? The raw materials are being exhausted and the foreign exchange to replenish them and purchase spare parts and machinery are not available due to low inflow of foreign exchange into the economy.”
The MAN president noted that most of the industries in the manufacturing sector are operating at less than 10 per cent installed capacity because of the challenges of the lockdown. “The steel sector as we speaking now is operating at less than 10 per cent because COVID-19 came with its own challenge of social distancing with the implication that the production floors have to be reviewed, that means many of our members have to invest in Artificial Intelligence to be able to produce if they must adhere to the social distancing policy put in place by the Nigeria Centre for Disease Control,” he said.