The Manufacturers Association of Nigeria (MAN) has reported that the production and distribution costs of industrialists rose by 18.2% in the fourth quarter (Q4) last year, reflecting the worsening macroeconomic induces in the nation’s economy and negative impact on the manufacturing sector.
The association gave this hint on Monday in its ‘Q4 2024 Manufacturers CEO Confidence Index’ report, which reflected a very worrisome situation of the real sector investors in terms of high operational costs, policy inconsistencies, and economic instability.
The report’s findings showed that production and distribution costs surged by 18.2% in the quarter under review from the 20.1% increase recorded in the preceding quarter.
Though the report reflected a slight improvement in sales volume by 1.1% in the manufacturing sector in the quarter under review, it, however, indicated that other key indicators such as capacity utilisation, manufacturing investment, and employment further contracted.
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The capacity utilisation dropped by 0.8% in the quarter just as investment in manufacturing sector also declined by 1.2% even as employment in the sector also fell by 0.7 per cent, although the contraction was lower than the 3.5 per cent recorded in Q3 2024.
The report further showed that the cost of shipment rose by 11.6 per cent in Q4 2024 from the 17 per cent increase recorded in Q3 2024.
Commenting on the report’s findings, Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, noted: “A close observation of the analysis indicates that only the sales volume recorded a favourable change during the period of review.
“However, the analysis generally reveals that the adverse effects of the prevailing macroeconomic reforms are diminishing as production and distribution costs, capacity utilisation, volume of production, investment, employment, and cost of shipment recorded lower adverse changes compared to the previous quarter”, he added
The Director-General also linked the volatility in the foreign exchange (FX) rate, interest rate hikes, high energy costs, multiple taxation, poor infrastructure and inconsistent government policies as factors crippling the businesses of the manufacturers.
