COVID-19: How to drive growth in Nigeria’s manufacturing sector

The Nigerian manufacturing sector faced a contraction of 2.3% in 2020 according to the National Bureau of Statistics. Despite the country technically moving out of a recession, the Manufacturers Association of Nigeria highlighted various challenges impacting manufacturers such as difficulty in accessing Forex, gridlock at the ports, and the lingering effects of the COVID-19 pandemic. Mansur Ahmed, the President of the Manufacturers Association of Nigeria, emphasized the need for infrastructure improvements, particularly in the areas of energy and transportation, to facilitate the sector's recovery. Ahmed acknowledged the significant impact of the COVID-19 pandemic on the manufacturing sector's health in 2020, with the sector experiencing lower growth rates. He highlighted the longstanding issue of erratic power supply and the substantial increase in production costs, noting a nearly 30% rise despite a reduction in demand due to the pandemic. Ahmed expressed concerns about the sector's capacity utilization declining by almost 25% in 2020, underscoring the challenges that manufacturers continue to face. One of the key pain points Ahmed discussed was the need for government intervention to alleviate the sector's challenges and support its recovery. He mentioned ongoing efforts to stabilize the energy and power sector and policy initiatives to ease access to finance for manufacturers. Ahmed emphasized the importance of improving infrastructure and reducing constraints at the ports to enhance import processes. Additionally, he highlighted the potential benefits of strengthening linkages between the manufacturing and agricultural sectors through initiatives promoting backward integration. Furthermore, Ahmed pointed out the need to capitalize on the crisis as an opportunity for the manufacturing sector to enhance its integration into Nigeria's economy. He highlighted the potential for policy improvements to create a more favorable operating environment for manufacturers, citing initiatives such as tax reductions for small and medium enterprises. The President of the Manufacturers Association of Nigeria expressed optimism that these efforts would lead to significant improvements in the business environment and positively impact the sector's performance. Despite the challenges faced by Nigeria's manufacturing sector, Ahmed's outlook remains hopeful, emphasizing the potential for policy reforms and infrastructure enhancements to drive growth and foster resilience in the industry. As the country continues its journey towards economic recovery, concerted efforts to address the sector's key issues and capitalize on emerging opportunities will be crucial in shaping the future of Nigeria's manufacturing landscape.