A survey conducted by the Manufacturers Association of Nigeria (MAN) has revealed worsening impacts of the macroeconomic environment on the manufacturing sector.
The survey’s report, which was titled “Manufacturers’ CEO Confidence Index (MCCI),” covered the impact of the macroeconomic environment on key manufacturing indicators such as production and distribution costs, capacity utilisation, volume of production, investment, employment, sales volume and cost of shipment in the first quarter of 2024 (Q1’24).
Its unequivocal verdict was that “A cursory observation of the analysis reveals that all the manufacturing indicators recorded unfavourable changes due majorly to the high and unstable exchange rate, prolonged foreign exchange scarcity, escalated cost of energy, unstable import duty rate, high cost of borrowing and a further rise in inflation.”
“All of these grossly escalated the cost of manufacturing operations, distorted the manufacturing value chain, discouraged investments, increased job losses, and reduced sales volume.”
It added, “Production and distribution costs surged further by 20.7 per cent in the quarter under review from the 21.73 per cent increase witnessed in the preceding quarter. Capacity utilisation declined further by 9.76 per cent in Q1 2024 from 3.81 per cent witnessed in the preceding quarter. The volume of production slid further by 10.14 per cent in Q1 2024 from a contraction of 4.6 per cent recorded in the previous quarter.”
