(MAN)- Manufacturers lament high cost of production, interest rate
Written by Esther Omonegbe on January 20, 2020
The Manufacturers Association of Nigeria (MAN) lamented over the high cost of manufacturing in the country.
It was made known that, MAN, in its “Executive summary of 2019 manufacturing outlook,’’ lamented that manufacturing suffered as a result of many problems, although there was a slight improvement in electricity supply.
The report signed by its Director-General, Segun Ajayi-Kadir, stated that in the first half of last year the sector’s capacity utilisation slowed to 54.1 percent from 54.50 percent recorded in same half of 2018, indicating 0.4 percentage point decline over the period.
Part of the issues that contributed to the fall in capacity utilisation was infrastructure, poor macroeconomic and poor regulation by Government agencies.
He stated there was decline in capacity utilisation in Beverage, Food and Tobacco group at 55.3 percent, Chemical & Pharmaceutical at 47.4 percent, Wood & Wood Products at 49.4 percent and non-metallic at 52.7 percent, among others.
The MAN boss said industrial zones analyses presented a mixed-bag of performance, adding that while capacity utilisation in most of the zones increased in the first half of last year against the performance of the corresponding half of 2018, others declined when compared with the second half of 2018.
For instance, the report revealed that capacity utilisation in the Ikeja zone of MAN increased to 68.14 percent; Ogun 69.19 percent, Apapa 69.46 percent, Kano Sharada/Challawa 55.11 percent and Kaduna 49.5 percent. Others are Anambra/Enugu with 43.8 percent, Rivers stood at 54.07 percent.
“Conversely, capacity utilisation in Imo/Abia zone declined to 34.72 percent, Kwara/Kogi 44.13 percent and Abuja at 39.13 percent while Kwara/Kogi zone declined to 44.13 percent in the first half of 2019 as against 49.67 percent and 53.5 percent recorded in the first and second halves of 2018 apiece,” he explained.
He regretted that contrary to expectation, utilisation of local raw materials in the Textile, Wearing Apparel, Carpet, Leather & Leather Footwear sector stood at 54.6 percent in the first half of 2019, representing 8.09 and 3.0 percentage point decline from 62.69 percent and 57.6 percent recorded in the same half of 2018 and the preceding half.