Manufacturers’ survey shows low confidence in economic policy

MAN seeks improved management in 2021

By Yinka Kolawole

ECONOMY

Chief Executive Officers (CEOs) in the manufacturing sector under the aegis of Manufacturers Association of Nigeria (MAN) have passed a vote of no confidence in the management of the nation’s macroeconomic policies in 2020.

President, MAN, Engr. Mansur Ahmed, who disclosed this at a media luncheon organized by the association in Lagos yesterday, said that this was the key result of the Manufacturers’ CEOs Confidence Index (MCCI) survey for the fourth quarter 2020.

He therefore, called for improvement in the management of the macro-economy to enhance productive capacity in 2021.

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MCCI is an index created by MAN to gauge the  changes in manufacturing activities quarterly as a result of changes in the macroeconomic ambience and government policies.    It is the barometer used by MAN to garner the perceptions of CEOs of manufacturing companies on the impact of changes in the economy on manufacturing operations.

Ahmed stated: “Since the first quarter of 2020, aggregate MCCI scores have oscillated under the 50 neutral points – 44.4 points in Q1; 40.2 points in Q2: 43.3 points in Q3; and 42.06 in Q4 2020.

“The trend is a strong indication of lack of confidence of manufacturers in the economy in the whole of 2020 and that the manufacturing sector is indeed gasping for breath.

“Beginning with 2021 therefore, it is imperative that the management of the macro-economy is approached more pragmatically and the development of the productive capacities of nation enhanced intentionally.”

According to the respondent CEOs, some of the factors causing the low confidence in the economy by manufacturers include: difficult in accessing foreign exchange forex) for importation of raw-materials and machines, increased cost of electricity and high cost of transportation.

Others are low demand occasioned by sharp reduction in household purchasing power, high cost/unavailability of raw materials, high cost of shipment, high government taxes, levies and charges, poor infrastructure/bad road network, lack of or poor access to funds and, gridlock/congestion at ports.

“The sectoral performance of MCCI presents a scenario of further degeneration of confidence in the economy by manufacturers in the fourth quarter of 2020.      Consequently, it is important that while addressing the macroeconomic challenges including those thrown-up by COVID-19 and End-SARS, government needs to put in place fit-for-purpose sector specific incentives and measures that would improve disposable income of Nigerians, ramp up productions, increase employment, tax revenue and export proceeds,” MAN recommended.

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