Clear $7bn Debt, Manufacturers Beg FG

The Manufacturers Association of Nigeria has said that 2024 may not be a good year for manufacturers and that it foresees a challenging first six months of the year for players in the industry.

MAN also urged the Federal Government to clear the current $7bn Forex Backlog.

The Director-General of the association stated this in its “Manufacturing Sector Outlook for 2024” which was made available to journalists.

According to MAN, in 2024, sectoral real growth is expected to hit about 3.2 per cent; contribution to the economy will most likely exceed 10 per cent and the Manufacturers’ CEOs Confidence Index is predicted to rise above 55 points thresholds by the end of Q4 2023.

Average capacity utilisation is expected to hover around the 50 per cent threshold as the forex-related challenges and high inflation rate limiting manufacturing performance may linger until mid-year.

The report noted that the first half of the year will be challenging, with a subtle possibility of recovery from the third quarter.

It also noted that the sector may experience a meagre improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter.

MAN also predicts higher manufacturing output is envisaged from the beginning of the third quarter of the year as the government disburses capital provisions of the budget to abandoned, ongoing and new capital projects with expected special preference for locally made products.

By recommendation, the association advised the government to expend cost savings from fuel subsidy to deploy a bouquet of production-focused policies, backed with more structural measures to combat the peculiar inflationary pressures from insecurity, energy and transport costs.

It also recommended the overhauling of the power sector and incentive investment in renewables to boost electricity generation and promote energy-cost efficiency.