Manufacturers show minimal confidence in Nigeria’s economy

A recent report by the Manufacturers Association of Nigeria has revealed that manufacturers in the country are exhibiting minimal confidence in the current state of the economy. However, there seems to be a glimmer of hope as the operating environment is expected to improve in the near future. Shagun Ajay Kadeer, the Director General of the Manufacturers Association of Nigeria, shed light on the findings of the report during a recent interview with CNBC Africa. The quarterly CEO confidence index report highlighted some key points, with the director general expressing cautious optimism about the future outlook. Despite facing numerous challenges, including rising operational costs and supply chain disruptions, manufacturers have managed to maintain a level of confidence above the baseline score of 50 points. In the second quarter of 2022, the MCCI index saw a marginal increase to 54.6 from 53.9, indicating a sustained positive sentiment among manufacturers. Ajay Kadeer attributed this confidence to a sense of hope and resilience within the industry, enabling production to continue despite the obstacles. The report evaluates various factors such as employment levels, the business environment, government policies, and production levels. While production has remained steady, concerns loom over potential stockouts and escalating raw material prices. One of the challenges that manufacturers are grappling with is the issue of employment, with layoffs and hiring freezes becoming more prevalent. Ajay Kadeer mentioned a significant reduction in capitalization in certain regions, leading to operational adjustments and relocation efforts due to security concerns. The director general emphasized that the current survival strategies adopted by manufacturers are not sustainable in the long run. While cost-cutting measures may temporarily alleviate financial pressures, they could ultimately hamper competitiveness and erode profit margins. Ajay Kadeer highlighted the need for a conducive business environment that fosters growth and innovation, enabling Nigerian manufacturers to thrive both domestically and internationally. Despite the uncertainties looming over the industry, Ajay Kadeer remains hopeful that the Nigerian government will address key pain points and collaborate with manufacturers to enhance the operating landscape. As the industry navigates through turbulent waters, the resilience and determination of Nigerian manufacturers shine through, underscoring their commitment to weathering the storm and emerging stronger on the other side.