The nation’s manufacturing sector is on a slippery slope no thanks to the lingering forex crisis currently having rippled negative effects on key economic fundamentals, The Nation has learnt.
Corroborating the foregoing, the Manufacturers Association of Nigeria (MAN) said that the challenges of inadequate foreign exchange and energy crisis have dropped the manufacturing output growth from 5.8 per cent in the first quarter of 2022, Q1 ’22, to 3.0 per cent in the second quarter, Q2’22.
Giving this insight was the Director-General of MAN, Mr Segun Ajayi-Kadir.
The MAN boss, who spoke at the annual workshop/awards organised by the Commerce and Industry Correspondents Association of Nigeria (CICAN) in Lagos, with the theme, ‘Manufacturing: Despite FX and Energy Crisis,’ impressed on the federal government and monetary authorities the need to address the twin evils of foreign exchange and energy crises largely responsible for the lull in the economy, especially the manufacturing subsector.
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“The frontline challenges of inadequate foreign exchange and energy crisis dipped the manufacturing output from 5.8 per cent in the first quarter of 2022 to 3.0 per cent in the second quarter,” he said, adding, “These challenges massively affected manufacturers that were already confronted by inclement operating environment compounded by the COVID-19 pandemic and the current Russian Ukrainian war.”
Manufacturing indicators, Ajayi-Kadir stressed, “Negatively affects capacity utilisation contribution to real Gross Domestic Product (GDP), investment; employment; cost of production; among others were also negatively impacted. “Increase in cost of energy pushed up global inflation which affected the cost of importation across the world including Nigeria, with the limited foreign exchange inflow from crude oil sales, foreign exchange demand pushed over the bounds of supply and contributed to the depreciation in Naira value,” he said.