The Manufacturers Association of Nigeria (MAN) has said that inadequate access to Forex would affect manufacturing growth out, urging the government to allocate a significant proportion of available foreign exchange to the productive sector.
The Director-General, MAN, Segun Ajayi-Kadir, made the disclosure at the Commerce and Industry Correspondent Association of Nigeria (CICAN) workshop in Lagos themed: “Manufacturing: Despite FX and Energy Crisis”.
Ajayi-Kadir also called for further investments into Nigeria’s electricity production sector to boost economic productivity, citing manufacturing growth output fell from 5.8% in the first quarter of 2022 to 3.0% in the second quarter.
He said the FG needs to address the foreign exchange and energy issues that contribute to unfavorable movements in manufacturing indicators.
Ajayi-Kadir noted how challenges of inadequate foreign exchange and the energy crisis dipped the manufacturing growth output from 5.8% in the first quarter of 2022 to 3.0% in the second quarter, saying that these negatively affected manufacturers that were already dealing with poor operating conditions caused by COVID-19 and Russia invasion of Ukraine.
He warned that increase in energy costs, due to global inflation, affected the cost of importation across the world, including Nigeria, citing manufacturing indicators such as capacity utilisation, contribution to real Gross Domestic Product (GDP), investment, employment, cost of production, competitiveness among others were also negatively impacted.
MAN warned that due to limits to foreign exchange inflow from crude oil sales, foreign exchange demand pushed over the bounds of supply and contributed to the depreciation in naira value, stating that these issues can be adequately addressed by considering critical measures such as the allocation of a significant proportion of available foreign exchange to the productive sector, particularly manufacturing.
“Further investment in the electricity value chain must be carried out and the government must commit to adding 10,000 MW to the current electricity distributed in the country.
” Also, we must embrace and support significant development of renewable energy mix as the country has huge potential for solar and wind,” Ajayi-Kadir said.
