The Manufacturers Association of Nigeria (MAN) and other stakeholders have raised the alarm over worsening business climate in the country that has left about 335 manufacturing concerns in comatose while 767 others shut down in 2023.
Former chairman of MAN, Frank Onyebu, said the challenges confronting the real sector still persist. He noted that the state of the manufacturing sector was getting worse by the day and government is busy introducing new and unfavourable policies, compounding the pain of the already challenged sector.
The Nigeria Labour Congress (NLC), through its spokesman, Benson Upah has said that the labour movement is distressed by reports of companies shutting down or relocating to other countries because they directly translate to massive job losses, financial meltdown, deepening of hunger and poverty, and a bad advertisement for Nigeria.
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Similarly, Daniel Dickson-Okezie, a member of the Lagos Chamber of Commerce and Industry (LCCI), explained that Nigeria’s unemployment rate surged to 5.0 per cent in the third quarter of 2023 from 4.2 per cent in the previous quarter. Citing the latest Labour Force Survey, he pointed out that this is an increase of 0.8 per cent from the second quarter of 2023.
He noted that right now, 42 per cent of Nigerians are unemployed and as at the end of the year, unemployment rate might increase to 50 per cent.
Dickson-Okezie listed the causes for the collapse of companies to include rising interest rate, naira devaluation, which resulted in increased operating cost; double digit inflation rate and weak purchasing power; high cost of funds; infrastructure deficit, shortage of dollars, among others.
In a recent report, MAN lamented that the manufacturing sector is beset with multidimensional challenges that have been a clog in the wheel of the sector.
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“In 2023, 335 manufacturing companies became distressed and 767 shut down. The capacity utilization in the sector has declined to 56%; interest rate is effectively above 30%; foreign exchange to import raw materials and production machine inventory of unsold finished products has increased to N350 billion and the real growth has dropped to 2.4%.” MAN frowned at a recent policy introduced by the government, the Expatriate Employment Levy (EEL), noting that the levy, which it described as punitive, was already being perceived as a punishment imposed on investors for daring to invest in Nigeria and indigenous companies for employing needed foreign nationals.
MAN Director-General, Segun Ajayi-Kadir, said the association fully supports policies aimed at promoting quality job opportunities for Nigerians, but urged the president to consider the wider negative impact of the EEL. (The Sun)