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The manufacturing sector in Nigeria experienced a significant increase in production and distribution costs in the fourth quarter of last year, with expenses soaring by 18.2%.
This substantial rise highlights the worsening impact of the macroeconomic environment on manufacturers.
The surge in costs has added to the challenges faced by manufacturers, who are already grappling with a range of issues, including high inflation, foreign exchange volatility, and inadequate infrastructure.
The increased costs are likely to have a ripple effect on the entire economy, potentially leading to higher prices for consumers and reduced competitiveness for Nigerian manufacturers in the global market.
To this end, the Manufacturers Association of Nigeria (MAN) has expressed concerns over the rising costs and has called for urgent government intervention to address the challenges facing the sector.
Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, disclosed this on Monday in the Q4 2024 Manufacturers CEO Confidence Index report, which painted a grim picture of the industry’s struggles with high costs, policy inconsistencies, and economic instability.
The report states, “The findings show that production and distribution costs surged further by 18.2 per cent in the quarter under review, from the 20.1 per cent increase witnessed in the preceding quarter.”
While the report indicated a slight improvement in sales volume by 1.1 per cent, other key indicators such as capacity utilisation, manufacturing investment, and employment recorded further contractions.
MAN’s MCCI is an index to measure changes in the quarterly pulse of manufacturing activities concerning movement in the macroeconomy and government policies.
It has a baseline of 50 points, suggesting a stationary point in the economy. When the MCCI rises above 50 points, it shows manufacturers have increasing confidence in the economy, and when it drops below 50, it signifies otherwise.
