Following the inauguration of President Bola Tinubu as Nigeria’s president, he promptly announced the removal of fuel subsidy, unification
of the exchange rate as well as his desire to turn Nigeria into a productive powerhouse amongst other promises.Exactly one year ago, President Bola Ahmed Tinubu was inaugurated into the highest political office in the country. During his inaugural speech, he made many promises including promoting manufacturing and the light industry, reducing unemployment and reducing the country’s import dependency. TOBI AWODIPE writes that the real sector is still awaiting the President’s promises.
Instead of more jobs, the Manufacturers Association of Nigeria revealed that 767 companies shut down in the last year, with 335 others on the verge of shutting down due to exchange rate volatility, rising inflation, worsening investment climate, rising operational and input costs, under capacity utilisation and reduced purchasing power among other factors. Thousands of people were thrown into the job market. There has been no new or even revised industrial policy to date.
The indicators in question include production and distribution costs, capacity utilisation, production and investment volumes, employment and sales as well as shipment costs. Data sourced from the World Trade Organisation , reveals a stark contrast in manufacturing export values between Nigeria, South Africa, Egypt and Morocco in 2023, with South Africa, Morocco and Egypt recording $45.38 billion, $30.61 billion, $20.14 billion respectively compared to Nigeria’s record of just $3.21 billion.
On his part, the President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture , Dele Oye, said for manufacturers and businesses, the last year has been a mixed bag of feelings.
“In the face of all these problems, businesses still must deal with skyrocketing energy costs, input costs and high interest rates. Interest rates, which simply means the cost of money, be it a long-term loan or short-term working capital, is between 30-40 per cent now. All these are added input costs and have added to the cost of doing business.
According to the MAN DG, manufacturers’ most pressing challenges in the last six months include unstable and high FX/FX scarcity; inadequate power supply/frequent power outages; high inflation/high operating cost ; high cost of energy , high and multiple taxes, charges and levies. On how to rebuild the manufacturing sector and reposition the economy towards attaining sustainable growth, he urged the government to stabilise and improve access to FX, particularly for the manufacturing sector; and promote energy security by directing NERC to discontinue the high electricity tariff for Band A Customers as no manufacturer has access to the said 20 hours electricity supply; ensure the affordable lending rate and increased access to credit; upgrade infrastructure nationally;...
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