M.A.N: Rising inflation a threat to recovery of industrial sector

The Manufacturers Association of Nigeria (MAN) has raised concerns over the significant rise in headline inflation to 16.47 percent in Nigeria in January, stating that it poses a threat to the envisaged recovery and growth of the industrial sector. During a recent interview on CNBC Africa, Segun Ajayi-Kadir, the Director General of MAN, discussed the implications of the increasing inflation on manufacturers and shared recommendations for economic recovery. Ajayi-Kadir highlighted the challenges faced by the manufacturing sector, including the impact of COVID-19, rising compliance costs, and regulatory hurdles. He emphasized that the rise in inflation exacerbates these challenges by reducing disposable income and impacting consumer purchasing power, ultimately hindering the sector's ability to thrive. Ajayi-Kadir stressed the urgent need to address rising inflation to prevent prolonged delays in the industrial sector's recovery, particularly in terms of demand. He emphasized the importance of stabilizing consumer price levels and outlined key recommendations to achieve this goal. These recommendations included intensifying efforts to enhance infrastructure development, diversifying the economy, ensuring access to credit and foreign exchange at competitive rates, and lowering the overall cost of doing business. Ajayi-Kadir explained that improving productivity and efficiency in the manufacturing sector can help drive down costs and stabilize prices. Additionally, he called for the revitalization of moribund industries, such as the textile sector, to create more job opportunities and stimulate economic growth. While acknowledging the need for long-term strategies, Ajayi-Kadir also highlighted several near-term solutions that could address immediate challenges. These solutions included clearing bottlenecks in government task forces, reducing transportation costs, lowering power tariffs for manufacturers, and improving access to credit. He emphasized the importance of streamlining processes and removing bureaucratic hurdles to ensure effective implementation of these solutions. Ajayi-Kadir also called for the relaxation of foreign exchange restrictions and repatriation policies to support manufacturing activities and ease currency pressures. By addressing these issues promptly, Ajayi-Kadir believes that Nigeria can mitigate the adverse effects of inflation on the industrial sector and pave the way for sustainable growth and recovery. The recommendations put forward by MAN reflect the urgent need for coordinated efforts between the government, regulatory agencies, financial institutions, and industry stakeholders to address the challenges facing the manufacturing sector amid rising inflation. The implementation of these recommendations could play a crucial role in safeguarding the industrial sector's future and supporting Nigeria's economic recovery.