Man Foresees Challenging 2024 With Hopes Of Recovery In Q3

The Director-General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, has projected a challenging year ahead for the manufacturing sector, anticipating a subtle possibility of recovery starting from the third quarter of 2024.

Ajayi-Kadir emphasized that the potential recovery is contingent on deploying policy stimuli, supported by a mix of domestic growth strategies driven by exports and trade. The aim is to foster resilience, steady growth, and meaningful traction in the later part of the year.

However, the outlook for the manufacturing sector in the first half of the year may not be positive, according to Ajayi-Kadir. He highlighted global challenges faced by the manufacturing sector, citing struggling growth rates in China, the United States, South Africa, and Nigeria.

The MAN Chief pointed out that Nigeria's manufacturing growth rate plummeted to 0.48% in Q3 2023, compared to 2.4% in 2021, indicating a challenging environment.

Looking ahead to 2024, Ajayi-Kadir outlined the following projections for the manufacturing sector:

1. Clarity on the government's policy direction for industrialization.
2. Sectoral real growth expected to reach about 3.2%.
3. Contribution to the economy likely to exceed 10%.
4. The Manufacturers’ CEOs Confidence Index predicted to rise above the 55 points threshold by the end of Q4 2023.
5. Average capacity utilization to hover around 50%, with challenges such as foreign exchange and high inflation rates limiting performance until mid-year.
6. A meager improvement in manufacturing output anticipated from the third quarter as foreign exchange and interest rate challenges are expected to subside.

Ajayi-Kadir expressed optimism that higher manufacturing output could be expected from the beginning of the third quarter of the year.