The president of the Manufacturers Association of Nigeria (MAN), Ahmed Mansur has stated that over N67.38 billion was spent by members to generate electricity off the national grid, so as to keep their businesses going in 2019.
Making the disclosure on Thursday in Lagos at a media briefing held after the association’s 48th Annual General Meeting, Mansur stated that the issue of power had become a huge challenge for operators in the sector since energy cost has continued to take a huge chunk of the production cost.
According to him, in the period under review, energy cost accounted for over 38 per cent of the sector’s production cost.
Describing the performance of the nation’s economy, so far in 2020, as “fragile and slowly sliding into recession,” as a result of the public health crisis facing the whole world, Mansur called for more proactive initiatives from the Federal Government to mitigate the effects of the pandemic on the sector.
“The downward movement of key economic indicators reinforced the need for more proactive initiatives against reactive initiatives.
“For instance, while the aggregated economy recorded a positive growth as indicated by an increase in real national output to 2.39 per cent in 2019 from 0.81 per cent in 2018, manufacturing sector growth plunged significantly to 0.77 per cent in 2019 from 2.09 per cent recorded in 2018 (NBS).
“The dwindling manufacturing performance was substantiated by capacity utilization in the sector which slowed to 56.8 per cent in 2019 from 57.8 per cent achieved in 2018.
“This shows that the sector is still in need of a comprehensive and integrated support system from the government,” he argued.
Mansur also tasked the Federal Government to intervene on the issue of foreign exchange, noting that forex sourcing for the importation of raw materials, machinery and spares, not available locally, was becoming increasingly difficult for the nation’s manufacturers.
The MAN boss also lamented the huge inventory of unsold finished manufactured products, that had risen to an all-time high of about N402.4 billion. He stated that the development had gone a long way in confirming the reality that the disposable income of the average Nigerian consumer had been grossly eroded.
He described the numerous, oftentimes duplication of demands from the tiers of government in form of taxes, levies, fees and permits, which the nation’s manufacturers still contend with, as a major challenge hindering growth in the sector.
“Manufacturing companies are continually overwhelmed with multiple regulations from different regulatory agencies and excessive drive for revenue by government agencies. And this has continued to be a major disincentive to the nation’s manufacturing sector,” he noted.