The Lagos Chamber of Commerce and Industry (LCCI) has lamented that the country’s manufacturing sector is still struggling in terms of growth even as the biggest beneficiary of the Central Bank of Nigeria’s (CBN) support to the real sector of the economy.
The Director-General of LCCI, Muda Yusuf, made the disclosure in Lagos during LCCI 2019 Economic Review and Outlook for 2020.
He pointed out that the sector got N459.69 billion out of N1.17 trillion disbursed by deposit money banks between May and October last year.
He stated that local manufacturers still find the business environment unsupportive, given the myriads of challenges such as epileptic power supply, poor road network, high cost of borrowing, over-regulations, multiplicity of levies, weak demand, sluggish economic recovery, port-related challenges, among others.
“Manufacturing sector grew marginally by 1.1 per cent in the third quarter, up from -0.13 per cent in the previous three months, bringing average growth between January and September to 0.59 per cent.
“Between July and September, growth in the sector was buoyed by rapid expansion in the cement industry, which grew by 6.87 per cent. Unpacking the components, we note that growth in the sector is not broad-based as only four of 14 sub-sectors including cement and paper industries saw higher growth.
“The sector has been the biggest beneficiary of CBN’s aggressive credit push to the real sector, receiving N459.69 billion out of N1.17 trillion disbursed by deposit money banks between May and October.
“These constraints make local manufacturers produce at higher costs, making their products less competitive compared to cheap foreign ones, the reason local producers operate below full capacity.”