The Manufacturers Association of Nigeria (MAN) has urged the Federal government to urgently resolve the knotty issue of foreign exchange scarcity and the energy crisis, lamenting that these challenges have stifled the real sector.
The real sector is having difficulty getting raw materials owing to stifling foreign exchange scarcity while the high cost of diesel has also hit its bottom line.
Currently, the Naira exchange for N444 at the I & E window while has plummeted from N780 to $1 at the parallel market.
The energy crisis is also suffocating the industry which has continued to get diesel to power its machines at N800 per litre.
Speaking at the annual conference and workshop of Commerce and Industry Correspondent Association of Nigeria (CICAN) in Lagos, the Director-General, MAN, Segun Ajayi-Kadri, said inadequate foreign exchange and energy crisis, have hugely challenged the sector, forcing a dip of the sector’s output from 5.8 percent in the first quarter of 2022 to 3.0 percent in the second quarter.
Ajayi-Kadri, who spoke on the theme “Manufacturing: Despite FX and Energy Crisis”, said these challenges massively affected manufacturers that were already confronted by an unpleasant operating environment, caused by the COVID-19 pandemic and the current Russian-Ukraine war.
He said manufacturing indicators such as capacity utilisation, contribution to real Gross Domestic Product (GDP) investment, employment, cost of production, competitiveness among others were also negatively impacted.
He added that with the limited foreign exchange inflow from crude oil sales, foreign exchange demand pushed over the bounds of supply and contributed to the depreciation in Naira value.
Segun Ajayi-Kadir stressed that the challenges must be adequately addressed to arrest further degeneration in the performance of the sector.
“In doing that, we consider the following measures critical such as the allocation of a significant proportion of available foreign exchange to the productive sector, particularly manufacturing.
“Further investment in the electricity value chain must be carried out and the government must commit to adding 10,000 MW to the current electricity distributed in the country.
“Also, we must embrace and support significant development of renewable energy mix as the country has huge potentials for solar and wind,” he said.
Ajayi-Kadir added that the scope of road infrastructure should be expanded and the tax credit scheme developed and refurbished.
The highpoint of the event featured the presentation of an award to Akiko Dangote, a business mogul and Chief Executive of the Dangote Group of companies received the revolutionising manufacturing in Africa awards, while Anthony Chiejina, Group Chief, Branding and Communication Officer, Dangote Group, received the corporate communications expert of the decade award and several other awardees.
– Media Report