Why FG should give serious attention to manufacturing sector-MAN President

The economy, and in particularly, the manufacturing sector has been the worst hit by the combination of external and domestic challenges, according to the President of the Manufacturers Association of Nigeria (MAN) , Otunba Francis Meshioye.

Meshioye noted that  starting from 2015/2016, the Nigerian economy expressed a recession triggered by the global financial crisis that was due to the sharp decline in the oil market.

“Just as we were beginning to recover from the recession, a global health pandemic emerged, disrupted economic activities and global supply chains, posing a significant threat to industries,” said  the MAN president  who spoke in welcome address  at the Adeola Odutola Lecture for the 51stannual General Meeting of the Association held on Thursday 19thoctober, 2023 at Oriental Hotel, Victoria Island, Lagos.

 He acknowledged President Bola  Tinubu’s positive policy decisions and the redirection of the economy starting from his first day in office.

“Your Excellency, our Association has taken due notice of your policy pronouncements, particularly within your first 100 days in office. Some bold policy actions, including the removal of fuel subsidy and introduction of managed float of the exchange rate, have elicited the commendation of most economic actors and stakeholders.

“The fallout of those measures have equally thrown up some policy imperatives that should be addressed in order for the economy to rebound and for the citizenry to appreciate and reap the long-term benefits of the various reform measures.

“In addition, we seek your intervention to facilitate an engagement between the Central Bank of Nigeria and MAN to discuss the recent lifting of the restriction on access to foreign exchange on 43 items.

“We are confident that the outcomes of conversation will allow the CBN to achieve its objective of reducing pressure on the parallel market and effective control of the foreign exchange administration. At the same time, it will ensure that domestic production is not overrun by influx of imported alternative and our raw materials that are not locally available could be procured using the official market.

“Your Excellency, since its inception, MAN has been at the forefront of promoting and advancing the industrial development of our nation. In the course of its journey, our Association has engaged in impactful collaborations and continuous engagements with the Nigerian government and other relevant stakeholders, both within and outside the country.

“MAN has consistently provided a platform for manufacturers to come together to share their expertise and resources, in order to expand the frontier of our economic development and foster cross-border value chain to achieve sustainable economic growth and development.

“The Ministry of Industry, Trade and Investment remained our greatest ally. Your Ministry is the ladder that we climb to reach the Presidency and our ambassador to other Ministries, Departments and Agencies of Government.

“We are confident that you will raise the bar in this regard and that our collaboration and partnership will grow in leaps and bounds during your tenure.”

He noted that the journey of the association over past five decades has been one of grow innovation, and resilience, amid undeniably tough challenges.

Meshioye said Nigeria must rise up to the occasion given the promising growth trajectory and development opportunities embedded in the AfCFTA for industrial advancement of Africa.

“Manufacturing sector development is key to industrialisation. Sadly, the growth of industrialization in Nigeria arguably remains at very low ebb.

“Though the manufacturing sector is passing through hard and challenging times, setting a comprehensive and realistic agenda for the sector’s transformation will enhance its competitiveness and unlock its full potentials,” he said.

 The MAN president  said it has become a matter of necessity and urgency to deepen  awareness of the imperative of the AfCFTA, adding that there is the  need to develop the right strategies and concerted efforts to position  Nigeria’s economy as the number one manufacturing hub of the African economy.

According to him, “evidences from several parts of the world, including China, the United States, Japan, Germany, and South Korea, have shown the importance of the manufacturing sector in building a resilient economy. As an example, in 2021, average manufacturing output accounted for as high as 35% of Ireland’s GDP growth; 27.44% in the case of China, and 48% of Puerto Rico’s economy.

“In the United States, it accounted for more than 60% of the total exports and about 35% of the US economy’s total productivity growth. In Nigeria, the contribution of the manufacturing sector to the total output is not higher than 10%, with an average growth rate of approximately 2.3% over the last five quarters. Manufacturing sector development is key to industrialization.”

 The MAN President said for the Nigerian manufacturing sector to perform optimally and compete  with its peers across the world, some challenges must be urgently addressed by the government.

These challenges include  multiple taxation , high cost of borrowing,  infrastructural inadequacy, low local content development and patronage of made-in-Nigeria products  poor sectoral integration of the manufacturing sector and  shortage of foreign exchange

He called for a meeting between the Federal Government and MAN to brain-storm on these challenges and come up with the strategy to move sector forward for the benefit of Nigeria.

“ We earnestly seek a summit to engage government at the highest ministerial level to discuss the fate of the manufacturing sector in Nigeria,” he said.