Five ways Nigeria’s manufacturing sector can improve in 2022

As business activities commence in 2022, the Manufacturers Association of Nigeria (MAN) notes that the resilience of manufacturers may not be strong enough to keep their heads above the water seeing that they are yet to fully recover from the aftermath of the pandemic.

In its most recent survey, MAN stated that Chief Executive Officers of manufacturing outfits said the manufacturing operating environment had a mixed grilled performance, encouraging slow positive growth while it remains over-regulated with the high cost and an unfriendly environment.

“CEOs confirmed that issues of multiple and duplication of regulation, which often find expression in the excessive drive for tax revenue instead of widening the tax net, unfriendly tax practices of government agencies, poor access to the national ports leading to the high cost of clearing cargo and transporting goods are seriously impeding the performance of the manufacturing sector,” the report stated.

Hence the association recommends some policy actions the government can undertake to help the sector and its stakeholders bounce back to its pre-pandemic level with better performance.

First, MAN advises the need to further incentivize investment in the development of raw materials locally through the Backward Integration and Resource-based industrialization initiates.

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This has become crucial seeing that the global supply chain is yet to fully resume activities that are constraining production activities, adding that the government should call for more investors to key into these initiatives with appropriate and definite incentives.

Second, effective allocation of FX must be made available to the manufacturing sector for the importation of raw materials and vital machines and equipment that are not available locally.

“Government also needs to expressly direct the Central Bank of Nigeria to consult with the Ministries of Industry Trade & Investment and effectively engage MAN on measures for improving forex supply to manufacturing concerns,” MAN said.

Third, the government should revisit the revival of existing national refineries to produce fuels locally, embark on the rehabilitation of major highway corridors, improve trade facilitation infrastructure and deepen the ongoing development of the rail system to change the narrative on the operating environment from being a high cost to a low production cost environment.

Fourth, industrial policies in the country must be allowed to develop with proper monitoring and evaluation rather than abandoning or modifying them unduly.

Lastly, specific attention must be given to the security of life and investment in industrial areas including an upscale in security infrastructure, particularly in the Northern part of the country for priority attention.

“Government should also quickly invest in modern security such as drones, cameras, etc. for robust monitoring of the areas,” MAN advised.