For instance, the 2024 Report of the Manufacturers Association of Nigeria (MAN), released at the association’s 53rd Annual General Meeting (AGM) held in Lagos recently, revealed a huge surge in unsold inventory of N2.14 trillion in Year 2024, as against the N1.14 trillion recorded in 2023; a development attributed to the diminishing purchasing power of the average Nigerian consumer due to inflationary pressure.
Besides, the report also revealed that in 2024 alone, about 60 per cent of members of the Association operating in the North Eastern part of the country had to shut down their businesses due to inclement business weather.
The frailty of the sector was also revealed in the sector’s paltry 5.5 per cent contribution to the year’s total exports, a figure seen as reflecting the sector’s marginal integration into global and regional value chains.
The report also indicated that, while capacity utilization in the sector during the year under review improved marginally to 57.0 per cent from 55.1 per cent in 2023, persistent challenges such as rising costs of energy, forex volatility and high interest rates restrained further growth.
While the sector’s real manufacturing output increased modestly by 1.8 per cent year on year to N7.78 trillion from N7.64 trillion, a decline of 3.1 per cent was however recorded half on half in the year, as the real production reduced from N3.95 trillion recorded in H1 2024 to N3.83 trillion recorded in H2 2024.
Another major intractable challenge the sector has continued to grapple with is that of energy costs. For instance, the report revealed that substantial investments in self-energy generation, totaling N1.11 trillion from N781.68 billion of 2023, representing a 42.3 per cent increase, were made by companies in the sector in the year under review.
The rising cost of funds also remains a challenge in the sector. For instance, in 2024 the average lending rate stood at 35.5 per cent in H1 of the year and remained unchanged in H2 of the year, despite sectoral variations.
Speaking on the challenges at the association’s fifth Adeola Odutola Lecture in Lagos, its president, Otunba Francis Meshioye, attributed the development to inclement macroeconomic environment, policy failure, regulatory tyranny, inconsistent implementation, weak enforcement and inadequate protection of local industry.
‘Nigeria’s manufacturing is not shrinking by accident, but because of the manner and approach of our policy design and implementation, typically characterised by non-inclusive formulation process, non-enforcement and ineffectiveness.
The MAN boss believed one of the ways out is to deliberately place the nation’s manufacturing first through the Nigeria First Policy.
‘Countries that have successfully transformed their economies have done so by deliberately placing their manufacturing sector first. Nations like Vietnam, Indonesia, Japan and Bangladesh aggressively promoted local industries, secured domestic markets for their producers, and built stable and supportive policy environments to foster sustained industrial growth,’ Meshioye argued.
Also speaking on the development at the event, the President, Dangote Group, Alhaji Aliko Dangote, urged the government to gazette the Nigeria First Policy as a binding law with punitive measures for non-compliance.
He attributed the failure of past Executive Orders 003 and 005 to weak enforcement.
The industrialist would also want the government to mandate all MDAs to allocate at least 65 per cent of their annual procurement budgets to locally manufactured products.
The continent’s one of the most successful industrialists, who was represented at the event by the Executive Director at Dangote Group and former President of MAN, Engineer Ahmed Mansur, identified weak local patronage as a major challenge facing the nation’s manufacturing, noting that despite the local content laws, public and private buyers in Nigeria still prefer imported goods to those made in the country.
He expressed the hope that the ‘Nigeria First Policy’, if effectively implemented, would go a long way in boosting the nation’s GDP, reducing import dependence and generating jobs.