The Chemical and Non-Metallic Products Employers Federation has issued a stern warning that escalating production costs, the burden of multiple taxation, and intense foreign exchange volatility continue to pose a significant threat to Nigeria’s industrial stability.

This caution comes despite the observed resilience and innovation demonstrated by manufacturers in adapting to the nation’s harsh economic realities.

Presenting the President’s Report during the Federation’s 46th Annual General Meeting in Lagos, the President of CANMPEF, Chief Devakumar Edwin, acknowledged that despite numerous daunting macroeconomic challenges, the sector managed to record modest growth in 2024.

This growth, he explained, was primarily driven by increased local resource utilisation, product diversification, and expanding regional export opportunities.

Edwin stated that the Federation’s outlook for 2025 would focus on a new industrial agenda anchored on aggressive advocacy for vital infrastructure development, the strengthening of local value chains, and enhanced regulatory engagement, all aimed at supporting long-term growth.

According to him, Nigeria’s economy demonstrated resilience in 2024, expanding by 3.84 per cent in the fourth quarter to reach N22.61 trillion, with growth driven largely by the non-oil sector, especially financial and insurance services.

However, he emphasized that relentless inflationary pressures and persistent currency depreciation continued to undermine industrial competitiveness significantly.

Edwin highlighted the core operational hurdles facing the sector, saying, “The business environment remained constrained by high input costs, multiple taxation, and limited access to foreign exchange. Despite these headwinds, CANMPEF members showed remarkable adaptability — optimising resource use, innovating around local material sourcing, and exploring regional markets.”

He further noted that the removal of the fuel subsidy and the floating of the Naira, while intended to stabilise the economy, significantly escalated energy and import costs, thereby squeezing margins across all industries.

Citing the Central Bank of Nigeria’s Q4 2024 Economic Report, Edwin stated that the manufacturing sub-sector grew modestly by 1.79 per cent year-on-year, driven by product diversification and increased local sourcing, even as average capacity utilisation rose to 61.9 per cent.

He concluded by noting that the exchange rate, which averaged N1,623.26 to a dollar, reflected a 2.13 per cent depreciation, while headline inflation climbed to 34.8 per cent, a spike primarily driven by high energy costs and exchange rate volatility.