• Monday, May 20, 2024
businessday logo

BusinessDay

Productivity slump, job losses results of poor infrastructure – LCCI

businessday-icon

The Lagos Chamber of Commerce and Industry (LCCI) has said that decline in productivity and job losses in many manufacturing firms since Nigeria’s Independence are the results of decrepit infrastructure in the sector, stressing that key players in the real sector have operated under severe business environment.

The chamber, however, commended multinationals and conglomerates in the cement industry as well as food and beverage industry for their robust performance and resilience, insisting that they could even do much better if the operating environment were better.

“The reality is that job losses in the sector have been on the increase over the years, as productivity declined on the back of the harsh operating environment,” said Muda Yusuf, director-general, LCCI, in a statement to Real Sector Watch.

According to Yusuf, various policy interventions have not had the desired impact on the sector, adding that unless issues such as poor electricity supply to industrial zones, multiplicity of taxes and levies as well as high finance cost, among others, are addressed, the outlook in the sector will remain gloomy, particularly for small-scale industries.

“It is impossible to have a vibrant manufacturing sector in the face of rampant dumping of cheap imports in the country. Some of these imports are landing at 50 percent cost when compared with locally produced goods,” he said.

“Besides, manufacturers have to worry about high energy cost because the power improvement is yet to be sustained; they have to worry about high interest rates – 20 percent and above; they have to worry about a multitude of regulatory agencies making different demands on them; they have to worry about massive smuggling and under invoicing of imports and many more,” he said, stressing that multinationals and other conglomerates in the sector may have the resilience to cope due to their size, but the story is always a nightmare for manufacturing SMEs.

Production is critical to an enduring economic and social stability, he said, stating that the way forward is to address the fundamental constraints to manufacturing competitiveness in the Nigerian economy.