2016: Challenging year for Nigeria's manufacturers

It has been a year of unparalleled challenges for Nigerian manufacturers as they grapple with persistently high interest rates, acute forex shortages, and a tough operating environment that have resulted in significant job losses across the country. Babatunde Odunayo, Chairman of the Apapa branch of the Manufacturers Association of Nigeria, shed light on the dire situation facing the sector in an interview with CNBC Africa. The year 2016 proved to be one of the toughest periods for manufacturers in Nigeria, with the industry facing a myriad of obstacles that have squeezed margins and threatened the survival of businesses. One of the key issues highlighted was the forex intervention by the Central Bank of Nigeria (CBN), which directed 60% of forex allocation to the sector. However, Odunayo expressed doubts about the actual disbursement of funds to manufacturers, citing inadequate dollar cover for members. The lack of transparency in allocation has left many manufacturers struggling to import essential goods and materials needed for production, further exacerbating the challenges faced by the sector. Despite efforts to engage with the CBN, the situation remains precarious for manufacturers who are in desperate need of forex support to sustain their operations. The economic downturn in Nigeria has been exacerbated by the forex crisis, which has led to a shortage of foreign currency needed for imports. The government's reluctance to borrow and invest in key sectors like manufacturing has hindered efforts to stimulate economic growth. Odunayo emphasized the need for strategic policies that prioritize dollar support for manufacturers to enable them to navigate the challenging economic landscape. He called on the government to articulate clear strategies and engage with stakeholders to develop effective solutions that address the sector's pressing needs. Looking ahead to 2017, the outlook remains bleak for Nigerian manufacturers unless decisive action is taken to address the underlying issues plaguing the industry. With uncertainties surrounding global oil prices and production cuts impacting the economy, the manufacturing sector is bracing for further challenges in the coming year. Job losses are likely to persist unless concrete measures are implemented to support the industry and boost investor confidence. Without a comprehensive policy framework that supports manufacturing growth and productivity, the sector faces an uphill battle in the months ahead. The uncertainties surrounding economic policies and lack of clarity from the government have left manufacturers in a state of limbo, with many unsure of what the future holds for their businesses. As Nigeria grapples with economic challenges, the manufacturing sector remains a vital component of the economy, contributing significantly to GDP and employment opportunities. However, without urgent intervention and support from the government, the sector's prospects remain uncertain. The coming year will be a critical period for Nigerian manufacturers as they navigate through a complex and challenging business environment that requires bold and decisive actions to secure their future.