The President, Manufacturers Association of Nigeria (MAN), Engr Mansur Ahmed
The Manufacturers Association of Nigeria said that available facts and recent experiences have shown that the emergence of a challenge in one country can became a major constraint with spiral effects for the entire world. According to the statement contained in the Manufacturers CEO’s Confidence Index (MCCI) recently released saying The learning curves from recent development include the need for leaders all over the world to jointly manage global peace and deepen the cord of interdependence of countries along the line of development priorities of nations and the obvious reality that when disruption occurs in any part of the global economy, only countries with automatic stabilizers and strong internal economic mechanisms will be able to respond appropriately.
The Manufacturers Association of Nigeria (MAN) designed the Manufacturers CEO’s Confidence Index (MCCI) as a gauge for a quarterly research and advocacy publication, which measures changes in pulse of operators and trends in the manufacturing sector quarterly, in response to movements in the macroeconomy and Government policies using primary data mined through direct survey on over 400 Chief Executive Officers of MAN member-Companies.
The trend observed by over 400 Chief Executive Officers of MAN member-Companies in the first quarter 2022 MCCI resonates with a priori expectations, the oscillatory trajectory of the macroeconomy and fluctuating manufacturing performances observed in the last two years. In fact, the report noted that the performance recorded is largely similar but with slight differing magnitude when compared with what was obtained in the last quarter of 2021.
Clearly, the prevalence of familiar binding constraints to the steady growth of the manufacturing sector, the reverse effects of COVID-19 pandemic and the food shortages, rising inflation, foreign exchange parity, economic uncertainty, general increase in price of petroleum products, supply chain disruptions and the growing concern of future increase in the prices of wheat and fertilizer manufacturing inputs occasioned by the Russian invasion of Ukraine are contributory factors that impacted the aggregate MCCI, it was noted.
“All of these clearly shows that the ongoing invasion of Ukraine will continue to have negative spiral effects on every sector of the economy if not halted as soon as possible. The implication of allowing the invasion to continue for the manufacturing sector will include enormous decrease in capacity utilization (as factories begin to experience stock-out situations), inflation, dwindling sales, lower productivity, unemployment and heightened insecurity. Certainly, all of these would also have severe implications for economic and social wellbeing of over 200 million Nigerians.
“Although the first quarter 2022 MCCI index score of 53.9 points fell below that of the last quarter 2021, the overall result shows that even though the economy recorded positive improvement despite unstable macroeconomic fundamentals, the manufacturing sector is still largely under severe pressure, its health very well in the fringes and below the desired performance threshold. In addition, feedbacks from manufacturers identified Limited supply of electricity; High cost of local and imported raw-materials; Persisting acute shortage of forex for importation of machine, raw materials not available locally and persisting insecurity in the country as the first our out of the challenges limiting the performance of the manufacturing sector in the period under review. As customary, MAN will include findings in the advocacy submissions to the Government backed with detailed recommendations on measures to address identified challenges inhibiting scale and competitive production in the sector, it was stated.
Undoubtedly, MAN stressed that the precarious situation that the manufacturing sector is currently in and the looming dangers ahead calls for a National Response and Sustainability Strategy to guarantee the survival of sector and avoid further de-industrialization.