“Expectation of an early reprieve for Nigeria’s embattled economy was laid to rest as the Manufacturer Association of Nigeria (MAN) said the country’s chances of coming out of the current recession before the end of the first quarter of 2017 was slim”.
The above statement by the Manufacturers Association of Nigeria indicates that the country is still in the woods just as there is no hope for early recovery even at the tail end of the first quarter of next year. Very disturbing prophecy, I must say. The country sinks into loss of jobs, a decline in real incomes, a slowdown in industrial production and manufacturing and a slump in consumer spending, things generally get more difficult and firms publicly traded on major stock exchange may ultimately be hurt.
Prolonged economic recession occasioned by the collapse of the world oil market in the past resulted in sharp fall in foreign exchange earnings apart from adversely affecting the economic growth and development of Nigeria. Other problems of the economy include excessive dependence on imports for consumption and capital goods, dysfunctional social and economic infrastructure, unprecedented fall in capital utilization rate in industry and neglect of the agricultural sector among others.
Rapid industrial development has been the main focus of economic development because of its potential benefits. Industrialization tends to propel economic growth and quicken the achievement of structural transformation and diversification of economies. However, the effect of Nigeria’s battered economy has touched virtually all sector of Africa’s largest population which has also made South Africa to overtake Nigeria as Africa’s biggest economy.
Undoubtedly, Manufacturers for now are struggling between balancing rising output cost pressure and passing the inflationary pressure on already constrained consumers by raising prices of some products.
These various pressures encountered by manufactures border on foreign exchange losses on dollar loans, the inability to access foreign exchange, high cost of production as well as poor electricity supply and hike in tariff. Other factors include gas shortages across the country which has forced companies to rely on the more expensive backup ‘fuel’.
Apart from these seeming difficulties, the Federal Government has called on firms not to lay off staff despite economic crunch. Recall that some airlines have partially withdrawn their services from Nigeria due to low patronage and high cost of doing business.
At a Press briefing in Lagos on the association’s annual lecture, Dr. Frank Jacobs, the President of MAN (Manufacturers Association of Nigeria ) said in “view of the reality of economic circumstances and prevailing economic policies , the earliest probable period the economy can be revived would be after March Next year “ .He went further to say the discordant tunes from government and its agencies such as central bank of Nigeria , have also been stalling efforts from the manufacturing sector to contribute its quota towards the restoration of the economy.
With the manufacturing sector’s dwindling revenue, apart from grappling with input cost pressure and weak consumer purchasing power, the hopes of improved earnings in the second half of 2016 look bleak. Nestle Nigeria Plc, Nigerian Breweries Plc, Dangote Cement Plc and Lafarge Africa all have suffered combined profit losses to the tune of N51.86 billion in the first half of the year which does not show sign of improvement any time soon.
Meanwhile, the Nigerian Association of Chambers of Commerce Industry,Mines and Agriculture (NACCIMA) has raised an alarm informing Nigeria that the real sector is reeling under the burden of rising costs of production in the state of a near-economic stagnation ,even as the sector is faced with the prospects of being the base by which the government hopes to obtain tax revenue to finance Nigeria’s ailing economy.
It is therefore imperative that efforts be made as a matter of urgency to raise the consciousness of Nigerians to patronize made in Nigeria products, as the Senate President, Dr. Bukola Saraki amply demonstrated recently. The Senate president, while receiving the President of Manufacturers Association of Nigeria (MAN) , Dr. Frank Udemba Jacobs who led members of the executives group to his office said the senate will not rest until the country overcomes her present economic hardship occasioned by recession. He went further to assure the nation’s manufacturers that the National Assembly would do all it takes to ensure maximum patronage for their goods and services by government agencies and Nigerians alike, with the believe that government would continue to adopt home grown policies and strategies that also have the capacity to offer required economic stimulus to the manufacturing sector.
The government should do everything within its powers to make sure that goods and products already banned do not rear their ugly heads back to the country as these are inimical to the manufacturing sector. Government’s plan to give agriculture a face-lift by providing farmers with inputs and loans with single digit repayment plan is a welcome development, apart from the fact that an undivided focus on agriculture linked to manufacturing may be a necessary and viable policy option.
