Fuel scarcity will cripple industry – Nigerian Manufacturers

The manufacturing industry in Nigeria faces a challenging year ahead as the President of the Manufacturing Association of Nigeria, Frank Jacobs, expressed concerns over the impact of ongoing fuel scarcity on the sector. In a recent interview with CNBC Africa, Jacobs highlighted the detrimental effects of the fuel shortage on the manufacturing industry, warning that it could hinder the sector's growth if not swiftly resolved. The President revealed that approximately 270 manufacturing companies had already been forced to shut down due to the sector's non-performance. Looking ahead to the prospects for 2018, Jacobs acknowledged that the government had implemented several policy measures in response to challenges faced in 2016, aimed at fostering economic growth and stability. The establishment of the industrial policy and competitiveness advisory council, which includes a significant representation from manufacturers, has been a pivotal step in enabling the sector to have a voice in shaping the economy's direction. Jacobs expressed optimism that the policies initiated in the latter part of 2017 would begin to manifest positive outcomes in the economy in 2018, setting the stage for a more promising year. However, he cautioned that the current fuel scarcity prevailing in the country posed a significant threat to the performance of the manufacturing sector and the broader economy in the initial months of the year. The inability to address this issue promptly could lead to a downturn in economic activities and production within the sector. Turning to the 2018 budget, Jacobs voiced hope that it would reflect a focus on infrastructure development, a critical component for supporting manufacturing operations. He emphasized that investments in infrastructure, such as power, roads, and railroads, were imperative for the sector's growth and competitiveness. The allocation of substantial funds towards infrastructure projects in the budget raised expectations for positive changes in the industry. Highlighting the challenges posed by inadequate electricity supply, Jacobs underscored the sector's reliance on self-generated power, which escalates production costs and diminishes competitiveness both locally and globally. The high cost of production has rendered some Nigerian products less competitive compared to imported goods, resulting in the closure of numerous manufacturing companies. Jacobs emphasized that manufacturers often persevered in the industry not solely for profit but as a patriotic endeavor to contribute to national development. With global oil prices exceeding $70 per barrel, Jacobs identified potential benefits for Nigeria, anticipating a boost in the country's foreign reserves. The increase in foreign exchange reserves could stimulate economic growth and facilitate the enhancement of the manufacturing sector, signaling positive developments for the economy amidst the escalating oil prices.