The Manufacturers Association of Nigeria (MAN) has described the rising general price level in the economy with the January 2021 inflation rate peaking at 16.47 percent as a threat to current efforts to revitalize the nation’s manufacturing and industrial sector and position it on the path of sustainable growth.
The Director General of the association, Mr. Segun Ajayi-Kadir, was quoted by the News Agency of Nigeria (NAN) as making the remarks while reacting to the latest inflation rate for January published by the National Bureau of Statistics (NBS) on Tuesday.
Ajayi-Kadir said that the increase in food inflation rate at 20.57 percent in January, from 19.56 per cent in December 2020, would compound the already high cost of living and vitiate the real value of disposable income of the average Nigerian.
The industrialist expressed concerns that the inflation-triggered weak consumer spending would worsen the high stock of unplanned inventory that the manufacturing sector had been contending with over the past months.
He expaitiated: “The manufacturing sector has been struggling, particularly in the past four quarters, from the combined effect of COVID-19, deteriorating infrastructure, high regulatory compliance cost and tax obligations.
“So, rising and high inflation, perennially high interest rates and scarce/high rate of forex has compounded the downturn in the sector in terms of the envisaged recovery. The concerted efforts of government to recover the economy will have to address the aforementioned challenges”, Ajayi-Kadir added.
As part of the remedial strategies, the MAN Director General advised the government to intensify efforts aimed at stabilising the general price level in the economy by boosting agricultural output and diversifying the Nigerian economy in order to guarantee stable prices in both agricultural and manufactured goods.
This is even as the industrialist advocated the resuscitation of moribund industries in the country to boost industrial output of locally manufactured goods, particularly food items, to tackle the surging prices of goods.
“Government should also partner with the Manufacturers Association of Nigeria to accelerate the success in the resource based industrialisation initiative of the Association. Government should assist manufacturing productivity with credit at competitive price.
“This could be in the form of concessions and enhancing existing special credit windows or creating additional ones for this important sector of Nigerian economy”, Ajayi-Kadir added.
The NBS reported a surge in the inflation rate to 16.47 per cent from 15.75 per cent in December 2020, translating to a 0. 71 per cent increase.
According to the official statistics producing and reporting agency, during the month under review, the composite food index rose by 20.57 percent compared to 19.56 percent in December.
It attributed the rise in composite food index to increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetable, fish and oils and fats.