Latest multi-sectoral reviews of the Purchasing Managers’ Index (PMI), by the Manufacturers Association of Nigeria (MAN), performance across the sectoral groups have shown that not notable improvements have surfaced on critical manufacturing drawbacks.
The report averred that upon marginal support from the Federal Government in terms of fiscal policy framework to the manufacturing sector, the performance of the sector remains very weak to push up optimal performance.
MAN made it clear that for two consecutive months now, no sectoral group recorded below 50 points benchmark, which shows a reasonable level of improvement in the manufacturing sector performance and a pointer to a good outing in the last quarter of 2018.
The trade group report stressed that “Notwithstanding, the manufacturing sector is still faced with myriad of challenges, ranging from infrastructure deficit, multiplicity of taxes, policy contradictions, exorbitant cost of clearing and transporting raw materials from the ports to factories, poor access to Lagos Ports, weak port infrastructure to increasing incidences of smuggling and counterfeiting”.
However, the report recognized improved performances across the sectorial groups except for Electrical & Electronics sectoral group.
According to MAN, the performance of Electrical & Electronics Sectoral Group recorded above 50 points benchmark, its basis point contracted by 6.7 points owing mainly to the menace of smuggling and counterfeiting that has continually plagued its performance.
To tame the tide of challenge, MAN is seeking additional government’s intervention to support operators in the Group with policies that will discourage unbridled inflow of used and smuggled Electrical & Electronics products to the country.
The report further disclosed that recorded the most significant improvement with a positive change of 13.9 points in the Textile Apparel & Footwear sectoral Group (TAFSG) could be attributed to a number of factors, which include fiscal support, improved local patronage, and incentives for cotton growers, increasing access to development finance windows, and the recent approved concessional gas pricing mechanism.
However, in performance ranking, the TAFSG was followed closely by Motor Vehicle & Misc. Assembly Group (MVMAG) with 12.5 points increment.
Still on local automobiles challenges, MAN observed that the rise in basis points without a virile auto component allied industry is linked to the prevailing low patronage of locally assembled automobiles and the obvious abuse of some provisions of the Automotive Policy by some portfolio investors, which indirectly aids importation of fully assembled automobiles to the detriment of locally assembled vehicles.
In summary, MAN agreed that “For the last two months of 2018, all indices used in measuring Purchasing Managers’ Index recorded improved performance; a development that indicates that the manufacturing sector is on the path of sustainable growth.
“Undoubtedly, the improved economic spending that characterizes the festive period and increasing tempo of patronage of Made in Nigeria product have spurred the performance of the sector in December”, MAN report averred.
