The Manufacturers Association of Nigeria (MAN) has raised an alarm that the double inflation digits was occasioned by the upsurge of the exchange rates.
Engr. Frank IKE Onyebu, Chairman, MAN, Apapa Branch who stated this during the association’s Annual General Meeting, (AGM) recently in Lagos noted that foreign exchange suddenly became very scarce with most manufacturers unable to procure vital raw materials.
Onyebu said “Exchange rate shot up, driving inflation to double digits. At the same time consumer demands plummeted. To make matters worse, the government, following similar reactions from governments around the world, imposed a lock-down that affected most of the industrial regions of the country.”
He pointed out that companies, which had been struggling pre-pandemic, had to face the fight for survival, stressing that many companies were forced to lay off staff in order to remain afloat, which compounded the already precarious unemployment situation.
The Chairman said, “The economic environment of the nation became hostile to business even before the coronavirus pandemic. The manufacturing sector was particularly badly hit because of the familiar, oft-repeated challenges of infrastructural deficiency and other structural problems.
“These challenges became more acute with the onset of the coronavirus pandemic. Oil price volatility, occasioned by the sharp decline in demand following a global lock-down that resulted from the pandemic, only compounded the situation. Nigeria, being a mono-product economy with almost complete dependency on crude oil for its foreign exchange earnings, was clearly in trouble.”
He stressed that economic activities within Apapa and Amuwo-Odofin industrial area were hampered by decaying, or in some cases complete absence of infrastructure: epileptic power supply, deteriorating roads, inefficient port operations, amongst others.
He said, “The Zone has advocated and achieved the following with water regulatory commission: The year 2018-2019 Bills are hereby waived, the concession of 79 percent on N0.1324 per cubic meters rate for 2020 Water Abstraction charges and beyond is accepted, metering of Consumer facilities to determine actual abstraction is on-going as to who is to provide the meter. All consumers extracting for non-commercial purposes and those extracting less than 10,000 cubic litres per day are excluded.
“The branch advocated against the resurgence of multiple taxations payable to the State and Local Governments, re-construction and maintenance of roads within the Mile 2, Coconut roads, the Tin-can Island Ports and Apapa Ports, the re-construction of Point Roads to Apapa Wharf, the Liver Pool to Tin-Can Island roads amongst others. The branch advocated for the construction of call up parks for truckers and tankers, the installation of functional scanners at the ports, the strengthening of relationships with relevant multilateral agencies to attract support and linkages, and for the reversal of the Land Use Charge to Pre-2018 and government yielded to considering the reform of the Land Use Charge in 2020.”
In his presentation, Mazi Sam Ohuabunwa, past Chairman, MAN, Ikeja, who is also past Chairman, NESG, urged the Federal Government to formulate policies that is capable of promoting manufacturing, advising MAN members to be export-focused for the country to be able to recover quickly from the prevailing recession and to record economic growth.
He said, “Many companies have shut their doors and many others are gasping for breath! Many people have lost their jobs, and many have been pushed into poverty. The Nigerian manufacturing sector has long been in dire straits even before the advent of COVID-19 and naturally became a major victim because of previous “co-morbidities”. I do not need to rehearse the many woes that the Nigerian real sector has faced over the years because that would be boring to this audience.
“Inflation has climbed to 14.23 per cent at end of October, unemployment at 27.1 per cent as at 2020 Q2 and misery index at 39.66 per cent. Youth unemployment is frightening at 34.9 per cent and poverty has shot up to 40.1 per cent, thus, drastically eroding consumer purchasing power. The rapid depreciation of the Naira against the dollar and other international currencies is helping to fuel inflation. Nigeria is actually facing a revenue and productivity crisis. Revenue is running far short of expense forcing the government to resort to what many call excessive borrowing.”
– NAN