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The President of Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs has weighed production activities in 2016 and noted that the last 11 months appeared to be the worst in the history of manufacturing in the country going by the numerous challenges encountered during the year.
In an interview, Jacobs listed critical challenges that hobbled activities some of the challenges to include lack of access to foreign exchange to import raw materials, poor infrastructure, high cost of energy (both electricity and petroleum products) as well as a difficult operating environment.
Corroborating Jacobs views, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said the developments in the economy and the business environment suffered serious collapse due to forex crisis and policy inconsistencies on the part of government.
He said the features of a declining economy had long manifested in the horizon before the declaration of technical recession as technical recession was first sited by major manufacturers earlier in February.
He said “We had weak and declining purchasing power, high unemployment, weak investors’ confidence, weak fiscal position of the government at all levels; drop in sales and private sector profitability, low and declining capacity utilisation, among others. High energy cost, escalating cost of transportation, high interest rate and weak exchange rate impacted on productivity and competitiveness across all sectors of the economy. Inflation reached a peak of 18.4 per cent in November, from 9.6 per cent in January, the highest in recent years.
“There were fiscal and monetary policy responses to the prevailing economic conditions during the year. Flexible exchange rate policy was adopted, petroleum product subsidy was discontinued, fiscal leakages were blocked, treasury single account (TSA) was introduced and tax revenue optimisation was scaled up.
“These were major policy milestones some of which were painful but inevitable. The expectation is that confidence will be restored, but it will take some time. The issue about confidence is that it could be swiftly lost, but difficult to regain,” he added.
However, giving an antidote that must be considered at this first quarter, MAN boss, Jacobs called for caution in giving projections of activities in 2017.
According to him, the unstable situation in the economy demands caution as policy responses in the New Year will determine how fast the economy recovers from the current doldrums.
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