The Manufacturers Association of Nigeria, MAN, has blamed the decreased in value of goods produced in 2022 on high inflationary pressure, high interest rates, multiple taxation, high energy costs, forex illiquidity, shortage of raw materials, among others.
The harsh economic environment pushed the value of manufacturing production down to N6.67tn in 2022 from N7.39tn in 2021, indicating a decline of N720bn, The Punch reports.
The Chairman, MAN, Apapa branch, Frank Onyebu, made the revelation on Tuesday during the annual general meeting of the branch.
He added that supply shortages, surging material prices and difficulty in hiring qualified staff stalled the growth of the manufacturing sector.
He said, “The value of the manufacturing sector’s factory output declined to N2.68tn in the second half of 2022 from N3.73tn recorded in the corresponding half of 2021.
“This represented N1.05tn or 28 per cent decline over the period under review. There was also a decline of N1.31tn or 32 per cent when compared with N3.99tn recorded in the preceding half.
“The value of manufacturing production totalled N6.67tn in 2022 as against N7.39tn recorded in 2021. Manufacturing production was severely affected in the second half of 2022 by the absence of implementation of new capital projects by the government as they focused on the election.”
Speaking further, Onyebu noted that many manufacturers exited Nigeria to neighbouring countries in 2022 due to the harsh operating environment.
He added that more were planning to leave, while others were hanging on by a thread, hoping for the new administration to turn things around.
He added, “Manufacturing sector local raw materials sourcing averaged 52.8 per cent in 2022 as against 51.5 per cent recorded in 2021.
“The increase in the local raw materials utilisation in the sector during the period is due to increased difficulty in sourcing forex, which compelled manufacturers to look more inward for raw materials notwithstanding the associated huge cost.”