Despite the harsh operating environment since the beginning of 2022, some local manufacturers have expressed confidence in the country’s economy.
Director General of the Manufacturers Association of Nigeria (MAN), Olusegun Ajayi-Kadir, stated this in MAN’s quarterly research and advocacy index, which measures changes in the pulse of operators in the country made available to The Trumpet in Lagos.
In the Chief Executive Officer’s (CEO) index, the association stressed that the Manufacturers CEO Confidence Index (MCCI) also measures the pulse and trends in the manufacturing sector on a quarterly basis.
In a statement issued in Lagos, the association said: “The MCCI is a response to movements in the macro-economy and government policies, using primary data from direct survey on over 400 Chief Executive Officers of MAN member companies across the country.
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“It is computed using data generated on standard diffusion factors of current business condition, for the next three months, current employment condition, rate of employment, employment condition for the next three months.”
“In the last six quarters beginning from the second quarter of 2021, manufacturers have sustained improve confidence in the economy as index scores remained above the 50 baseline. In the second quarter of 2022, the index of MCCI marginally increased to 54.6 point up from 53.9 points recorded in the first quarter of the year.”
It further explained that despite the many challenges including poor access to foreign exchange (forex) for importation of raw materials not available locally, rising global inflation, government’s aggressive drive for revenue, frequent collapse of the national grid, increase in price diesel, scarcity of wheat and other manufacturing inputs due to the ongoing Russia-Ukraine war and wide spread insecurity that combined to limit productive activities in the economy during the quarter, the manufacturers were still confident in the national economy.
MAN said the above mentioned challenges were some of the improvements in the second quarter of 2022, which implied that manufacturers’ confidence in the economy slightly improved above what obtained in the preceding quarter.
It added that the development showed that manufacturers responded to the economic challenges that prevailed in the second quarter with appropriate survival strategies and adjustments including remodeling of production operations after the marginal slowdown experienced in the first quarter.
It also showed that the Russia-Ukraine war has affected the entire world, which it said, reflected the interdependence of counties as a global village, adding: “The effect of the Russia-Ukraine war clearly underscored the popular maxim that the world has become a global village.
“The occurrence of an incidence in a part of the world, notwithstanding how specific we may think, can actually become a global issue. Therefore, apart from the need for proper management of global peace, the series of global occurrences and the lessons learnt demand that national government should begin to take drastic measures to manage the phenomena proactively going forward.”
It also asked government to intentionally create an anticipatory policy framework that would facilitate automatic stabilisation of the economy in the event of domestic or global shocks, while addressing the operational challenges limiting the performance of the sector.
