Market News

By Kingsley Jeremiah, Abuja

As the Federal Government, in Abuja, harped on diversification of foreign exchange sources through export of manufacturing products yesterday investors in the country’s manufacturing value chain insisted that a mismatch in government policies as well as differences in electricity pricing across the country posed grave challenges for the sector.

Speaking at the opening ceremony of an exhibition on Made-in-Nigeria Products held in Abuja, the Minister of Industry, Trade and Investment, Niyi Adebayo, said the Federal Government was focusing on diversified foreign exchange revenue to address FX challenges for manufacturers.

The minister, who noted that the contribution of the manufacturing sector remained critical for the nation’s economy, stated there was a need to export finished products.

He disclosed that the African Continental Free Trade Agreement would leapfrog the country’s manufacturing activities, making it a leading playeron the continent.

“The whole idea is to encourage manufacturers so that we can export our goods. We have to diversify our sources of foreign exchange earnings and the only way to diversify that is for us to use manufacturing as a means of earning,” he added.

President of the Manufacturers’ Association of Nigeria, Mansur Ahmed, decried the many challenges bedeviling the manufacturing, especially what was described as shortsighted and lopsided policies, insecurity, infrastructure as well as energy problems.

The differential in energy pricing, according to him, would affect competitiveness as manufacturers in some sections of the country pay higher than others.

Ahmed noted that while the COVID-19 pandemic posed serious challenges, the challenges are seen as opportunities for manufacturing activities, stressing that unless the country produces at least 60 per cent of what is being consumed, projected economic stability may remain a mirage.

According to him, within the sub Saharan region, Nigeria has the strongest and the biggest capacity to be the manufacturing hub of the continent if manufacturing activities improve.

“We have experienced significant challenges not only from the health issues of COVID-19 but also from its impact on our economic activities, and our supply chain systems, but the other side of the challenge is opportunity. And we can see that our manufacturers are seizing on those opportunities. They are capitalizing on the opportunities, not only to address the challenges, but to innovate and go beyond the challenge,” Ahmed said.

He noted that the sector requires significant and continuous support from the government, noting that policies need to be based on engagement with the industry operators.

Ahmed also asked the government to look at long-term impacts of policies.

“We need to think of what to do, so that we can backwardly integrate and ensure that 60 per cent of the products that we import as raw materials are produced locally.”

On solving foreign exchange challenges, Ahmed said manufacturers must be encouraged to export as a way of earning foreign currency, stressing that the country must not rely on oil anymore.

He said: “When you have a strong manufacturing capacity that is also export oriented, the stability and availability of your foreign exchange become guaranteed because oil prices fluctuate.”

He said the foreign exchange supply must become stable to enable operators to plan, stressing that manufacturing requires ability to predict the environment for planning.