The Manufacturers Association of Nigeria (MAN) has blamed the subdued growth of the manufacturing sector in the third quarter of the year (Q3’24) on hostile economic policies of the government.
Recall that the National Bureau of Statistics (NBS) in Q3’24 GDP report noted that the manufacturing sector was one of the least growing sectors during the period, with a growth rate of 2.18 percent, reports Vanguard.
In a statement made available to our correspondent yesterday, Director General of MAN, Segun Ajayi-Kadir, said that the meager growth indicates that the sector is being choked by interest rate hikes, high exchange rates, and escalated energy costs.
He stated: “Undoubtedly, this underperformance underscores the harsh effect of hostile economic policies which have largely constrained the country’s goal of rapid industrialisation and have left the economy struggling for survival. “Unfortunately, the Nigerian government has been characterized by its passive response towards the countless challenges battling the manufacturing sector.”
Ajayi-Kadir added that the decline in the real growth of the sector is a clear indication of the detrimental impact of the prevailing macroeconomic policies.
He explained, “This is further evidenced by the significant drop in nominal growth from 36.59 percent to 32.97 percent year-on-year, driven by high inflationary pressure and the exit of major multinational manufacturing companies.
“It is evident that inflation has been a significant factor in undermining the growth of the manufacturing sector, as the sector has been particularly vulnerable to the unstable macroeconomic environment, exacerbated by recent economic reforms.
“Agriculture plays a crucial role in fueling the growth of the manufacturing sector by ensuring a steady supply of affordable local raw materials.
“However, both the agricultural and manufacturing sectors failed to rank among the top five growing sectors during this period, primarily due to security challenges in farming areas and their subsequent negative impact on agro-allied industries.”
The MAN DG asserted that a vibrant manufacturing sector is essential for driving economic growth and prosperity.
He, however, lamented that the sector faces numerous challenges, including multiple taxation, limited access to credit, an unstable foreign exchange market, infrastructure deficits, and energy insecurity.
Ajayi-Kadir said the government must take decisive action to address these challenges and unlock the potential of the manufacturing sector.
