The Manufacturers Association of Nigeria (M.A.N) is worried over persistent foreign exchange scarcity and the energy crisis in the country.
Director General of M.A.N, Segun Ajayi-Kadri, made this known recently at a forum in Lagos organised by the Commerce and Industry Correspondents Association (CICAN)
He appealed to the Federal Government to urgently fix the two issues that have hindered the real sector from performing at optimal level for quite a while.
According to Ajayi-Kadri, the real sector is having difficulty procuring raw materials that are not available locally owing to stifling foreign exchange scarcity while the high cost of diesel has also affected its bottom line.
He noted that inadequate foreign exchange and energy crisis, have hugely challenged the sector, forcing a dip of the sector’s output from 5.8 percent in the first quarter of 2022 to 3.0 percent in the second quarter.
The M.A.N DG who was speaking on the theme “Manufacturing: Despite FX and Energy Crisis”, said the twin challenges have extremely limited manufacturers who were already uncomfortable with the harsh operating environment amplified by the COVID-19 pandemic and the ongoing Russian-Ukrainian conflict.
He said limited foreign exchange inflow from crude oil sales and excessive foreign exchange demand have contributed to the fast depreciation of the Naira.
According to him, manufacturing indicators such as capacity utilisation, contribution to real Gross Domestic Product (GDP) investment, employment, cost of production, competitiveness among others were also negatively impacted.
Ajayi-Kadir urged the government to adequately address poor power supply and other identified challenges to arrest further degeneration in the performance of the sector.
“Government should consider critical measures such as the allocation of a significant proportion of available foreign exchange to the productive sector, particularly manufacturing.
“Further investment in the electricity value chain must be carried out and the government must commit to adding 10,000 MW to the current electricity distributed in the country” he stressed.
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