Manufacturing capacity now 53% as NACCIMA says real sector in stagnation

Reacting to this and many other negative indicators, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) says the real sector is a near state of stagnation and needs serious government intervention to survive.

According to the umbrella body of all chambers of commerce and industry in Nigeria, rising interest rate, power drops, delay in the implementation of the 2016 budget and harsh business environment are threatening the survival of this critical sector of the economy.

The real sector majorly encompasses manufacturing, agriculture and solid minerals, among others.

“The real sector is reeling under the burden of rising cost of production in a state of near economic stagnation, while facing the prospects of being the base on which the government hopes to obtain tax revenue to finance the economy,’ said Bassey Edem, national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) at a review of the state of the economy in Lagos.

“Rising inflation has greatly reduced the real income and the purchasing power of the average Nigerian,” said Edem.

According to him, the economic team of the Federal Government must now review current monetary and fiscal policies and come up with policies that will take the country out of recession.

“As we lend our voice to the calls by the Monetary Policy Committee for the urgent economic diversification of the economy away from oil to manufacturing, agriculture and services, we would like to point out that a call for stakeholders to increase investment in these select sectors of the economy should be followed by lower interest rates in these sectors, as the current rates are too high to stimulate the much needed growth to lift the economy out of its current phase,” he said.

He said the recent signing of power purchase agreement by the Federal Government and 14 solar energy firms is a welcome development, urging that government should ensure that the timeline in the agreement is strictly adhered to, to ensure improvement in power supply all across the country within the shortest possible time.

He said although implementation of the 2016 budget may have been delayed due to paucity of funds, given the partial deregulation of the foreign exchange market, it is expected that government revenue is now closer to its targets and implementation can occur in full scale.

“We call on the federal government to redouble its efforts in implementing the 2016 budget as a tool to stimulate economic activity especially in the identified sectors that have been targeted as alternative sources of revenue and credible sources of diversification from crude oil,’’ NACCIMA boss further said.

He stated that the recently approved agricultural roadmap by the Federal Government deserves commendation, stressing that to achieve its aim of food sufficiency, preservation and export in the country, there is a need to put incentives in place to develop the grassroots farmers and transform peasant farming to mechanised farming, while encouraging commercial farming in rural areas.

“This is important for the reduction of poverty in the rural areas and the provision of raw materials for the industrial sector,” he said.

Nigeria’s manufacturing sector is currently in recession, beset by harsh business environment, characterised by poor power supply and high alternative energy costs,  multiple taxation, dearth of foreign exchange with which to import inputs, among others.

ODINAKA ANUDU