The Manufacturers Association of Nigeria (MAN)’s an instrument called and known as Manufacturers CEO’s Confidence Index (MCCI) designed to measures changes in pulse of operators and trends in the manufacturing sector quarterly has revealed a general declined across all industrial zones in the country.
According to the surveyed conducted through the aid of MCCI by over 400 Chief Executive Officers of MAN member-Companies of MAN during the quarter under review and observations from analysis on industrial zones activities show that operating environment in the zones within the Middlebelt and Rivers/Bayelsa zone was the toughest during the quarter under review.
The report disclosed that the index score of Bauchi/Benue/Plateau fell below the 50 points baselines to 46.3 points from 48.3 points recorded in the first quarter of the year, 2022. Likewise, Index score of Abuja zone also declined to 43.5 points from the 44.8 points in the first half of the year, it stated. while River/Bayelsa scored recorded 45.0 points, fell short from the 46.0 points recorded in the first quarter 2022.
The second quarter under review show the Middlebelt which houses Bauchi/Benue/Plateau industrial zones, the most unsettled region due to insecurity challenge in the country. According to the report, a result of the situation, a number of companies in the zone operated at sub-optimal level, while other have either shut down operations or relocated to a safer environment. Also, the
companies experienced severe stockout of primary raw materials, particularly agro-allied as most of the farmer had taken to their heels due to insurgency.
The Q2 report pointed out that Manufacturing and other business activities in the Rivers/Bayelsa zone appears to be struggling with the impact of aggressive drive for internally generated revenue by Government to bridge revenue gaps occasioned by the divesting activities of International Oil Companies from hydrocarbon to renewable energy sources. The huge autonomous investment in crude oil business in the zone’s accounts for the number of induced investments in the area, report stated.
The report has that over 400 Chief Executive Officers of MAN member-Companies through MCCI’s report revealed that there was meagre improvement in the index score in the second quarter of 2022 implies that manufacturers’ confidence in the economy slightly improved above what obtained in the preceding quarter.
“MCCI Index administer on standard diffusion factors of 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. The report disclosed that the index has a baseline score of 50 points and scores above the baseline indicate improvement in manufacturers’ confidence in the economy, while index score of less than the baseline suggests deterioration in the operating environment.
The report disclosed that the Aggregate MCCI score of 54.6 points for the quarter under review, which is above the 50 baseline points by 4.6 points shows that manufacturers still have minimal confidence in the economy, with the expectation of improvement in the operating environment. For instance, the report highlighted that the performance of Bauchi/Benue/Plateau and Rivers zones with index scores below the baseline points is a serious cause for concern. The business ambiance in the second quarter was no doubt beset by numerous macroeconomic, regulatory and externally induced challenges, compounded by the lingering backlashes of COVID-19 pandemic and the ongoing Russian-Ukrainian war, stressed further.
Clearly, the report pointed out the resultant effects of these challenges continue to manifest in the escalation of global inflation, shortfall in the global supply chain followed by the rise in energy cost, fertilizer and fertilizer inputs, wheat grain, etc. Cumulatively, these challenges interplayed to shape the direction of performance of the manufacturing sector in the second quarter of 2022, added.
“It is therefore important for the Government to intentionally create an anticipatory policy framework that will facilitate automatic stabilization of the economy in the event of domestic or global shocks, while addressing the afore-mentioned familiar operating challenges limiting the performance of the sector.”
