By Barnabas Esiet.
The Manufacturers Association of Nigeria (MAN) has released its latest survey report, painting a grim picture of the country’s manufacturing sector in the first half of 2024.
Despite resilience in some sectors, the industry faces significant headwinds, including high operational costs, declining consumer demand, and rising inflation.
Globally, the economy has shown mixed results, with major economies avoiding a severe downturn. However, Nigeria’s economy continues to struggle, with sluggish real GDP growth, intensified inflationary pressures, and lingering policy uncertainty.
In Nigeria, capacity utilization in the manufacturing sector declined to 56.4 percent, while real manufacturing production value dropped by 1.66 percent year-on-year. The sector’s nominal output increased by 30.38 percent, driven primarily by rising domestic prices.
According to the report, local raw material sourcing improved slightly to 56.03 percent, but some sectors faced declines. Unsold inventory of finished products surged by 357.57 percent, reflecting declining consumer purchasing power.
Manufacturing investments rose by 29.63 percent, largely due to the depreciation of the naira. Employment generation capacity continued to decline, with only 2,606 jobs created in the first half of 2024.
The report highlights the urgent need for economic reforms to address these challenges. Key areas of focus include policy consistency, business environment improvement, and economic diversification.
The report underscores the importance of decisive economic reforms to reverse the current economic downturn, create jobs, reduce inflation, and improve the overall welfare of Nigerian citizens.
MAN highlights the urgent need for Nigeria to implement decisive and coherent economic reforms. Key areas of focus include enhancing policy consistency, improving the business environment, and fostering economic diversification.
The report emphasized the need for policymakers to address the challenges facing the manufacturing sector.
“The sector’s performance is a reflection of the broader economic challenges facing the country. We urge policymakers to implement reforms that promote economic stability, improve the business environment, and encourage investment.”
MAN’s findings and recommendations provide valuable insights for policymakers, stakeholders, and industry leaders.
As Nigeria navigates through these turbulent times, the resilience of its policy framework and the effectiveness of its economic management will determine the path forward.
To address the challenges facing the manufacturing sector in Nigeria, the report recommends:
1. Enhancing policy consistency and predictability
2. Improving the business environment through infrastructure development and regulatory reforms
3. Fostering economic diversification through investment in key sectors
4. Addressing high operational costs and inflationary pressures
5. Stimulating consumer demand through targeted interventions
By implementing these reforms, MAN believes that Nigeria can reverse the current economic downturn, create jobs, reduce inflation, and improve the overall welfare of its citizens.
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