By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has emphasised the need for government to critically focus on the challenges that have continued to limit the sector’s performance.
The Director General, Segun Ajayi-Kadir, who made the remark in Lagos, reiterated that manufacturing is a deliberate effort of governments world over, emphasising the need for government to incentivise and remove the binding constraints that limit the day to day survival of the sector.
“This is what I think government has not done, that is why the sector continues to perform very poorly.”
He bemoaned the challenges facing the sector that have limited its competitiveness, saying the country cannot have unproductive and uncompetitive manufacturing sector and expect that there will be no inflow of those goods produced, from outside the country.
“They unfairly compete with the domestic goods. “Now we are seeing economies around us perfecting their deals. With the Africa Continental Free Trade Agreement (AfCFTA) and the ETLS, Nigeria borders cannot be closed. We cannot have unproductive and uncompetitive manufacturing sector and expect that there will be no inflow of those goods we produce, from outside the country. They unfairly compete with the domestic goods.”
Reeling out some of the challenges hurting the sector he said: The downturn in the sector’s performance is connected to insufficient power supply, high cost of diesel and foreign exchange, and brain drain that is shrinking the labour force.
“We are also having a situation where many multinationals are having their monies tied down; they cannot export because it is within their right to repatriate profits. And we are having an environment where the communities where people operate are also putting a lot of pressure on them.
“Furthermore, we are in a transition period where many of the politicians have not focused on those critical infrastructures and issues that need to facilitate an enduring sustainable manufacturing process,” Ajayi-Kadir added.
Since the beginning of last year, the Russia-Ukraine war surged the cost of inputs largely used by manufacturers such as diesel and foreign exchange in Africa’s biggest economy.
He said the association has been engaging the government on improved forex, saying there cannot be an improved forex situation if the country does not produce what it imports.
“All of these are giving the impression that there is not going to be anything different except we up our game. Our engagement with government has been the fact that you cannot have an improved forex situation if the country does not produce what it imports. That is the simple way we can have relief of the naira.
“If our naira continues to pursue products that come from outside the country, you will use dollar to pay for it. But if you reverse the trend and these products are made here, we don’t need dollars to get them. But the CBN and those who manage our money have more considerations different from ours.”
He emphasised the need for a friendly environment, noting that if the environment is favourable, investors will come naturally. “The onus is on us to develop our economy, no one will do it for us .
“I prefer local investors. What we should do is to promote the local business. If the environment is favourable, investors will come naturally. The concentration should be on local investors. We are over 200million people in Africa. I don’t think there is any economy as buoyant as ours. We are a buying population.”
Ajayi-Kadir said the association’s engagement with the government has been to the fact that you cannot have an improved foreign exchange situation if the country does not produce what they import. “That is the simplest way to explain how you can have relief for the naira.”