The Manufacturers Association of Nigeria has requested the Federal Government to resolve the present $7 billion Forex backlog.
The PUNCH reported that MAN has stated that 2024 may not be a good year for manufacturers and that the first six months of the year will be difficult for industry players.
The association’s Director-General announced this in its “Manufacturing Sector Outlook for 2024.”
As on MAN’s projections, real sector growth is anticipated to reach approximately 3.2% in 2024; the economy’s contribution is forecast to surpass 10%, and by the end of Q42023, the Manufacturers’ CEOs Confidence Index is expected to surpass the 55-point mark.
Average capacity utilization is predicted to hover around 50%, as the currency-related issues and high inflation rate constraining manufacturing performance are expected to last until mid-year.
According to the paper, “based on the observed trend, it is clear that the outlook for the manufacturing sector in 2024 may not be positive, at least in the first half of the year. The time will be difficult, with a sliver of hope for recovery from the third quarter.
“The anticipated recovery is highly dependent on the implementation of policy stimuli backed up by a synthesis of domestic growth-driven, export-focused, and offensive trade strategies. This will foster resilience and consistent growth, ensuring that the industry achieves considerable traction in the second half of the year.”
The industry might see a little increase in manufacturing output as problems with interest rates and foreign exchange are predicted to go away starting in the third quarter.
MAN also forecasts stronger industrial output beginning in the third quarter of the year as the government disburses budget capital provisions to abandoned, existing, and new capital projects, with a preference for locally created items.
The group encouraged the government to use fuel subsidy savings to implement a slew of production-focused initiatives, backed up by more structural measures, to address the unusual inflationary pressures caused by insecurity, energy, and transportation expenses.
It also advocated for an overhaul of the power system as well as incentives for renewables investment in order to increase electricity generation and promote low-energy efficiency.
“The government should maintain all measures to increase the level of liquidity and degree of transparency in the official forex window even as the backlog of $7 billion forex obligations is cleared,” Ajayi-Kadir added.
“They should also prioritize forex and credit allocation to the manufacturers and reduce the number of BDCs into large and well-established operators to curb their excesses and untoward operations through effective management and supervision.”
