The Manufacturers CEOs Confidence Index (MCCI) are an index created by the Manufacturers Association of Nigeria (MAN) to gauge the pulse of the economy on quarterly basis has disclosed that the third quarter 2019 of all the MAN CEOs has affirmed that 70 percent of the sector sources foreign exchange (forex) has not improved. While 15 percent said that the sector’s foreign exchange (forex) sourcing has improved, the other 15 percent are not sure that forex has improved leaving 15 percent undecided.
The report further affirmed that much has not changed in the supply of forex to the industry for purchase of machines, raw-materials and other manufacturing input that are currently not available in the country. At the moment most manufacturers source forex only at the parallel market at unfavorable exchange rate, making manufacturing import bills for raw-materials and machinery that not locally available unnecessarily high.
“MCCI deploys a set of Diffusion Factors which include, 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 to measure a quarterly perception and confidence of manufacturers in the economy. In addition to the set of Diffusion factors for which information is generated on, the general macroeconomic ambience in terms Foreign Exchange, Lending Rate, Credit to the manufacturing sector and Capital Expenditure of the Government behaviours including business operating environment issues such as Over-regulation, Multiple taxes/levies, Access to sea ports, Local raw-material sourcing, and Government patronage of Nigerian manufactured goods and Inventory are also measured.
“MCCI has a baseline index of 50 points which suggests a stationary-state in the economy; any index point above 50 points indicates Manufacturers confidence in the economy and improvement in manufacturing performance, while any index point below 50 points indicates otherwise.
The Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones of the country and the ten Sectoral Groups of the Association said that this has been a major reason the sector has not competed favorubaly in the community market, particularly as it is a washed with cheap and sub-standard foreign substitutes.