Lagos, Jan. 28, 2021 – The Manufacturers Association of Nigeria (MAN) on Thursday pegged the composite manufacturers Chief Executive Officers (CEO) confidence index for the fourth quarter of 2020 at 42.06 points.
Mr Mansur Ahmed, President, MAN, gave the value at the 2021 edition of the MAN Reporter of the Year Award Ceremony/ Presidential Luncheon in Lagos.
Ahmed said the quarterly research of the association revealed that the aggregate Manufacturers CEOs Confidence Index (MCCI) oscillated under the 50 neutral points.
The trend, he said, was a strong indication of lack of confidence of manufacturers in the economy in the whole of 2020, and that the manufacturing sector was indeed gasping for breath.
“The research shows 44.4 points in Q1; 40.2 points in Q2: 43.3 points in Q3; and then 42.06 in Q4 2020.
“Though we project for improvement in 2021, it is imperative that the management of the macro economy is approached more pragmatically and the development of the productive capacities of nation is intentionally enhanced,” he said.
Ahmed listed key factors considered during the research to include accessibility and availability of foreign exchange, lending rates, size of loan to the sector and government’s capital expenditure.
Others, he said were, operating environment performance regulation, taxation, ports accessibility, local sourcing of raw materials, patronage of made in Nigeria goods, and unsold manufacturing products.
“The current business condition for this quarter under consideration is at 44.4 points, current rate of employment at 29. 8 points, while the business condition for the next three months, employment condition in the next three months and production level for the next three months are 48.3 points, 35.4 points and 52.4 points respectively.
“During survey, manufacturers identified difficulty in accessing forex for importation of raw materials and machines, increased cost of electricity and high cost of transportation among others as observed challenges of manufacturing in the period.
“The poor performances of the indexes, therefore, demand for better management of the macro economy and strategic support for the manufacturing sector to maintain production in spite of the intensity of the second wave of COVID-19.
“The sector demands intentional initiatives to better control the spread COVID-19; and the building of institutional framework that will checkmate all forms of restiveness that can dislocate the economy,” he said.
The MAN President recommended a fast track of the unification of all foreign exchange windows in the country, and a swift approval of usage of foreign exchange sourced outside the official market for manufacturers.
He also called for the reversal of the current increment in electricity tariff with focus more on improving generation, distribution and efficient use of available electricity.
“To address difficulties in accessing funds, we urge the recapitalization of Bank of Industry (BOI) and Bank of Agriculture (BOA) to adequately meet the industry credit need at single digit interest rate,” he said.
The News Agency of Nigeria (NAN) that the MCCI is a barometer used by MAN to garner the perceptions of CEOs of manufacturing companies on the impact of changes in the macroeconomic ambience and government policies on manufacturing operations.
Factors considered in the MCCI processes include the current business condition, business condition for the next three months, current rate of employment, employment condition for the next three months and production level for the next three months.
The MCCI survey covered 400 Chief Executive Officers of MAN member-companies. (NAN)