Would you like to receive notifications on latest updates of the following headlines?

Financial Policy Reforms Hurting Real Sector’s Growth-MAN

POSTED ON June 13, 2024 •   Business      BY Abiodun Saheed Omodara
Director-General of MAN, Mr. Segun Ajayi-Kadir. l Credit: Likendin

The Manufacturers Association of Nigeria (MAN) has said that some Central Bank of Nigeria’s (CBN) policy decisions are not adding value to the growth of the manufacturing sector.

The association said it was better for the apex bank to collaborate with fiscal authorities to reinforce the sector’s traditional role in driving significant employment, heightened productivity, steady forex earnings, and sustained economic progress in the country.

MAN lamented that the apex bank had increased the Monetary Policy Rate (MPR) for nearly two years without yielding positive results to the manufacturing and the country’s economy in general. 

Director-General of MAN, Mr. Segun Ajayi-Kadir, said that MAN had hoped that the CBN would explore alternative measures, particularly in addressing the underlying causes of inflation, primarily cost-push factors in the country.

Ajayi-Kadir urged the apex bank to carefully evaluate the impact of monetary policy actions on the manufacturing sector and adopt policies that promote the resilience and competitiveness of manufacturers in the country. According to him, these effects are intensified by the current monetary stance, contributing to constraints on investment and expansion. 

He pointed out that a combination of heightened borrowing costs and reduced liquidity would hinder manufacturers’ ability to invest in innovative technologies, expand production capacities, or venture into new markets.

“As a result, this could lead to delays or cancellations of planned initiatives, ultimately constraining the sector’s potential for growth and its overall contributions to economic growth and development,” he stated.

While speaking on the country’s current capacity utilisation, the economic expert said: “According to MAN survey, the capacity ultilisation of the manufacturing sector reduced from 56.4 per cent recorded in 2022 to 55.1 per cent in 2023.

Also, the growth of the sector reduced to 1.40 per cent in 2023 from 3.35 per cent and 2.45 per cent recorded in 2021 and 2022 respectively.” Ajayi-Kadir stressed: 

“MAN acknowledges the efforts of the current CBN management team at confronting the economic challenges facing the country, notably the fluctuations in inflation and exchange rates.

“While MAN understands the reason behind the MPC’s decision, it is crucial for the committee to thoroughly assess the potential impact on the real sector and the multiplier effect on the nation.

“MAN earnestly urges the CBN to carefully evaluate the effects of these monetary policy actions on both the manufacturing sector and the broader economy. “Achieving a delicate equilibrium between addressing macroeconomic challenges and fostering the growth and resilience of the manufacturing industry is crucial.

“Therefore, MAN advocates for robust collaboration between monetary and fiscal authorities and suggests considering the following policy measures:Implement targeted interventions aimed at mitigating the underlying cost-push factors driving inflation, thereby alleviating the financial burden on manufacturers.”

He, however, advised that the CBN should prioritise forex and credit allocation to the manufacturers and fast track the proposed recapitalisation of the banking sector, emphasise the development of infrastructure within industrial hubs and bolster nationwide investments in renewable energy sources to alleviate logistical expenses and enhance competitiveness, reduce the reliance of the country on imported products and raw materials by providing incentives for investment in backward integration and local sourcing to reduce the pressure on dollar to the barest minimum.

0
READ ALSO
Nigeria's 2024 Budget Capital Extension Draws Criticism from Economists
BY Abiodun Saheed Omodara June 25, 2025 0

The Senate and House of Representatives have once again prolonged the implementation of the capital...

READ ALSO
IPMAN Links Rising Petrol Prices to Crude Oil Costs and Market Dynamics
BY Abiodun Saheed Omodara June 24, 2025 0

ABUJA, Nigeria (NAN) - The Public Relations Officer of the Independent Petroleum Marketers Associati...

READ ALSO
NGX Opens Week Bullish, Gains N279bn Amid Renewed Investor Confidence
BY Abiodun Saheed Omodara June 23, 2025 0

The Nigerian Exchange Limited (NGX) commenced the trading week on a bullish trajectory, adding N279...

READ ALSO
Oil Prices Surge Amid U.S. Airstrikes on Iran's Nuclear Sites
BY Abiodun Saheed Omodara June 23, 2025 0

Oil prices rose on Monday while the dollar gained strength following the U.S. airstrikes on Iran's n...

READ ALSO
POS Terminals Drive N223tn in Transactions Amid Shift From ATMs
BY Abiodun Saheed Omodara June 23, 2025 0

Point of Sale (POS) terminals processed transactions worth N223.27 trillion in 2024, marking a drama...

READ ALSO
Palm Oil Trade Boosting Bilateral Ties with Nigeria - Malaysia’s Envoy
BY Abiodun Saheed Omodara June 23, 2025 0

The High Commissioner of Malaysia to Nigeria, Aiyub Omar, has reveal that  the thriving pa...

READ ALSO
African Energy Chamber Urges World Bank to Lift Ban on Upstream Oil and Gas Financing
BY Abiodun Saheed Omodara June 19, 2025 0

The African Energy Chamber (AEC) has called on the World Bank to lift its ban on financing upstream...

READ ALSO
FG to Reclaim Dormant Oil Wells as NUPRC Implements 'Drill or Drop' Policy
BY Abiodun Saheed Omodara June 13, 2025 0

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has informed oil producers of its inte...

OUR CHANNELS:

Nigeria's Gemstone Potential: A Deep Dive into 10 Rare Minerals and Their Regions of Origin
BY Abiodun Saheed Omodara June 24, 2025 0

Nigeria is making waves with a revolutionary $400 million Foreign Direct Investment dedicated to cre...


IPMAN Links Rising Petrol Prices to Crude Oil Costs and Market Dynamics
BY Abiodun Saheed Omodara June 24, 2025 0

ABUJA, Nigeria (NAN) - The Public Relations Officer of the Independent Petroleum Marketers Associati...


EFCC Charges Businessman, Company with $75,000 Fraud
BY Abiodun Saheed Omodara June 24, 2025 0

A businessman, Peter Otomewu, along with his company, Pebeto Enerji Limited, was brought before the...


Osimhen Willing to Join Manchester United for Under £200,000 a Week
BY Abiodun Saheed Omodara June 24, 2025 0

Victor Osimhen is reportedly willing to accept a weekly wage of just under £200,000 at Manches...


Trump Announces Iran-Israel Ceasefire Deal, Tehran Denies Formal Agreement
BY Abiodun Saheed Omodara June 25, 2025 0

Former U.S. President Donald Trump has announced that Iran and Israel have agreed to a “comple...


French Police Arrest 12 over Alleged Drugging of Women at Music Festival
BY Abiodun Saheed Omodara June 24, 2025 0

French police have arrested 12 individuals suspected of drugging female festivalgoers during the ann...


NATO Warns Iran Against Nuclear Weapon Development Amid Rising Tensions
BY Abiodun Saheed Omodara June 24, 2025 0

In a renewed effort to curb escalating violence in the Middle East, the North Atlantic Treaty Organi...


Mertens Announces Retirement from Football, Cites Age and Fatigue
BY Abiodun Saheed Omodara June 24, 2025 0

Belgian football star Dries Mertens has officially announced his retirement from professional footba...


Qatar Closes Airspace After Iranian Strike on U.S. Base in Doha
BY Abiodun Saheed Omodara June 24, 2025 0

In a swift move to safeguard lives and property, the government of Qatar has closed its airspace fol...


Tinubu Launches National Mechanised Farming Programme to Tackle Food Insecurity
BY Abiodun Saheed Omodara June 24, 2025 0

In a bid to combat food insecurity and encourage youth participation in farming, President Bola Tinu...


More Articles

Load more...

Menu