75.1% of manufacturers says forex sourcing by the sector dipped in Q4 of 2021 against previous record

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The Manufacturers Association of Nigeria (MAN) engaged Manufacturers CEOs Confidence Index (MCCI) as an index to measure changes in quarterly of manufacturing activities in relation to movement in the macroeconomy and Government policies.  According to the Association, the Index is therefore barometer used by MAN to aggregate the views of over 400 Chief Executive Officers of MAN member-companies on changes in the economy.

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The report further noted that the standard diffusion factors considered in the MCCI processes include the Current Business Condition, Business Condition for the next three months, Current Employment Condition (Rate of Employment), Employment Condition for the next three months and Production Level for the next three months.


MCCI also measures changes in key macroeconomic indicators including sector specific factors that represent Government activities and policy measures in the economy. Consequently, the report stated that the effects of movements in Foreign Exchange, Lending Rate, Credit to the manufacturing sector and Capital Expenditure of the Government were also measured.  In addition, it gauges the outcome of changes in business operating environment factors which include Over-regulation, Multiple taxes/levies, Access to seaports, Local raw-material sourcing, government patronage of Nigerian manufactured goods and Inventory of unsold manufactured products.

The report disclosed that the fieldwork from MCCI is administered on the over 400 Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones and Sectoral Groups of the Association through MAN’s branch networks.


This segment of the report presented the  behaviour of key macroeconomic variables such as forex, lending rate, commercial bank loans and Federal Government Capital Expenditure based on the perspectives of CEOs of manufacturing concerns in the quarter under review.

According to the figure ‘iv’ shows that the difficulty in sourcing forex by manufacturers further dipped in the fourth quarter of 2021 as against what obtained in the preceding quarter.

75.1% of manufacturers claimed that that forex sourcing by the sector did not improve in the quarter under review, which is higher than 59% that disagreed in the preceding quarter.

Also, the above figure ‘v’ shows that high-cost borrowing remained a perennial constraint of manufacturing in the country.  Manufacturers are of the believe that current lending rate discourages productivity in the sector. 75.1% of manufacturers observed that the current lending rate discourages productivity in the sector.  This is higher than 68.0% which took the same position in the preceding quarter.

  Limited access to funds variously has been identified as a persisting challenge of the manufacturing sector.

In this fourth quarter, 71.1% of manufacturers noted that the smallness of size of commercial bank loans to manufacturing does not support productivity in the sector.  Association revealed that 71.1% of manufacturers interviewed said that the current commercial bank loan does not encourage productivity in the sector.  When compare, it was discovered that this fourth quarter is higher than 62% that made the same observation in the preceding quarter.


Government has consistently budgeted for upscaling infrastructure to support economic activities through execution of capital projects. However, MAN noted that the low patronage of local industries, slow completion and general poor implementation of identified capital project has been the bane of the system with high-cost impact on manufacturing concerns. Saying 57.4% of manufacturers enumerated are of the view that Government capital expenditure implementation does not encourage manufacturing.  Emphasizing that capital expenditure implementation does not translate to adequate economic infrastructure and higher productivity.


Nevertheless, the fourth quarter of 2021 highlighted a gradual improvement in the macroeconomic economic and manufacturing operating environment buttressed by marginal recovery of some key manufacturing indicators.

Although, the report contained that the changes in almost all manufacturing indicators as measured in this report are still not as desired, the performance in the fourth quarter is better than what obtained in the preceding quarter.

According to the report, the resilience of manufacturers, the seasonal transactions and passive policy support sustained manufacturing in the quarter despite the prevalence of familiar and emerging excessive tax related challenges faced by manufacturers. Overall, the sector recorded a mixed grilled performance occasioned by meagre improvement in the operating environment indices and macroeconomic ambience evidenced by the high points, which cumulatively triggered the increase in the aggregate MCCI score for the quarter to 55.4 points from 54.0 points recording the preceding quarter, it added.

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