Manufacturers lament unfavourable foreign exchange rate, bad roads, poor access to credit & weak demand

By
Brand Spur
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The 2017 Manufacturing Sector Survey conducted by NOIPolls and CSEA has identified: Unfavourable foreign exchange rates (55 percent), Bad roads (55 percent), Unavailability of petrol and diesel (47 percent), Limited access to credit (45 percent), Policy inconsistency (44 percent), Lack of Infrastructure (39 percent), Unstable power supply (31 percent), and Weak demand (29 percent), as the top challenges facing the manufacturing sector in Nigeria.

The survey report released to the public on Tuesday 12th September 2017 also found the following:

  • 74 percent of manufacturing companies found the business environment unsupportive in 2017; and this finding represents a 14-point increase from the 2016 result (60 percent), indicating a worsening of the business environment. Similarly, lack of infrastructure, red-tapism and corruption were identified as some of the structural bottlenecks stifling the business environment.

  • 85 percent of manufacturing companies surveyed are not operating up to 75 percent of their installed capacity; and this was attributed to weak demand (69 percent), poor power supply (58 percent), petrol/diesel unavailability (38 percent), limited access to foreign exchange (26 percent).
  • Almost half of the companies interviewed (48 percent) considered importation of raw materials critical to their production; particularly medium to large manufacturing companies, with up to 62 percent of inputs imported.
  • 75 percent of manufacturing companies say the disparity in foreign exchange rates has had negative impact on their operations. Similarly, 80 percent of the companies affirmed that inflation has had a negative effect on their businesses.

  • All the manufacturing companies interviewed affirmed that the recession had impacted their business operations and profitability; with 70 percent stating that the recession had impacted their businesses negatively.
  • On the issue of Bad Roads, the survey found the South-West (59 percent), South-South (49 percent), North-Central (46 percent) and South-East (43 percent) regions were the most affected regions with poor state of roads. In particular, manufacturers lamented the poor state of some roads such as: Apapa-Tin Can Access road, Lagos-Ibadan express road, Benin-Ore road, Oyo-Ogbomosho (in South West), East-West road, Benin-Agbor road, Aba-Portharcourt road (South-South), Ajaokuta-Ayangba-Nsukka road, Lokoja-Ajaokuta road, Obajana-Okene road, Makurdi-Enugu road (North-Central and South-East) amongst others.