In light of the precarious situation that local manufacturers have currently found themselves, the Manufacturers Association of Nigeria (MAN) has charged the Federal Government to accelerate the process of recovery in order to revitalise the country’s real sector of the economy. Indeed, MAN posited that the macro-economic challenges in the country had trickled down manufacturers’ expectations, thereby signifying looming danger ahead for the economy this year.
The Director-General of MAN, Segun Ajayi-Kadir, who disclosed this to New Telegraph in Lagos, said that the association was urging the Federal Government as a matter of urgency to address the headwinds in the country’s economy. Ajayi-Kadir stated that government should also continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession to avert the complete shutdown of factories nationwide.
He said: “Government should as a matter of priority continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession to avert the complete shutdown of factories nationwide with multiplier effect on the employment.” According to him, there is also need to grant concessional forex allocation at the official rate to manufacturers for importation of productive inputs that are not locally available.
Speaking further on the effects of the acute FX shortage, he noted that output had declined significantly in many industries because of the challenges of accessing raw materials due to the scarcity of foreign exchange. According to him, many players in the economy now resort to the patronage of the parallel market at very prohibitive cost, as very little access exists at the official window.
“The sharp depreciation of the exchange rate and the parallel market, which is over 300 per cent has worsened the profitability of investments. The capacity to retain employment and the capacity to create new jobs have been greatly endangered because of the foreign exchange crisis. “The dysfunctional foreign exchange policy has negatively impacted foreign direct investment, foreign portfolio investment as well as other capital inflows into the country. “The multiple exchange rates, and the huge parallel market premium in the forex market remain major downside risks to investment growth and attraction of foreign capital into the economy.
This has continued to weaken the supply side of the foreign exchange market. “The inability of foreign investors to repatriate their profits and dividends as well as incomes have created considerable perception, reputational and country risk is-sues for the Nigerian economy. “All of these have been responsible for the sharp decline in the capital importation in recent years,” he added. On the country’s port reform, the MAN DG said: “Port users are still grappling with high cost of operations, the tedious procedures, documentation, weak application of technology and extortion.
“Scanners are yet to fully operational at the ports, the single window is yet to take off and weigh bridges are not in existence at our ports. “This is not a good commentary for the ports in the largest economy on the African continent. “These issues have become intractable and we appeal to the authorities to look urgently into the plight of port users. “The port is a very critical part of this economy. The port is the gateway for import and export and therefore very critical to the prosperity of the Nigerian economy.”