Latest news with #Manufacturers'AssociationofNigeria
Zawya
22-04-2025
- Business
- Zawya
Nigeria's manufacturing records $623mln expenditure on alternative energy sources, 17,949 employees exit in 2024 —Report
The nation's manufacturing sector was not without its fair share of challenges that faced the different sectors of the economy, in 2024, as a total sum of N1.11trilliion was spent by operators in the sector on alternative energy sources; and with 17949 employees exiting the sector, during the period. This, according to a new report, tagged: 'MAN Economic Review Half Year 2024', released by the Manufacturers' Association of Nigeria (MAN), indicates a 42.3 percent increase from N781.68 billion spent for same purpose, in 2023. The result, on a half-on-half basis, also revealed that manufacturers spent of N404.80 billion in H1 2024, increased by 75.0 percent to N708.07 billion in H2 2024. According to the report, the Food, Beverage & Tobacco sector recorded N229.41 billion in alternative energy spending, up from N182.76 billion in 2023, while Chemical & Pharmaceutical energy costs doubled to N208.68 billion. The Non-Metallic Mineral Products sector's energy costs increased by 33.7 percent to N118.49 billion, and the Textile, Apparel & Footwear industry saw a fourfold increase, reaching N26.45 billion in 2024, compared to N6.97 billion in 2023. The report noted that while there was an improvement in electricity supply situation for industries in 2024, with average daily supply increasing to 13.3 hours per day, up from 10.6 hours in 2023; electricity tariffs, however, surged by over 200 percent for Band A consumers, thereby increasing manufacturing costs, significantly, in the year under review. 'While power availability improved, many manufacturers still faced frequent outages, and costs as the country witnessed 12 national grid collapses and this remained a major concern. In response to unreliable grid power and increases in prices of Diesel and PMS,' the report stated. The number of employees leaving manufacturing companies also increased from 17,364 in 2023 to 17,949 in 2024, representing ongoing labour mobility, due to economic uncertainties, skill migration, and company restructuring. A total of 16,820 new jobs were created in 2024, a situation the report described as 'nearly unchanged' from the 16,799 created in 2023. On investment in the sector under review, the sector was said to have witnessed a decline in manufacturing investment by 35.3 percent year-on-year to N658.81 billion in 2024, reflecting economic uncertainty and reduced expansion plans. Perhaps a glimmer of hope was shown by the sector performance in H2 2024, regarding investments in the sector, as it witnessed a 19.4 percent increase compared to H1 2024, as manufacturers cautiously resumed capital expenditures. 'In nominal terms, total investment declined by 11.3 percent to N2.85 trillion, with Land & Buildings and Furniture & Equipment seeing the most significant declines,' the report stated. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Zawya
19-02-2025
- Business
- Zawya
Nigeria: High lending rates, lean loan sizes continue to hinder productivity — Report
Despite efforts and interventions by government, and other relevant authorities, at easing the pains of operators in the nation's manufacturing sector, a recent report released by the Manufacturers' Association of Nigeria (MAN), the Manufacturers' CEOs Confidence Index (MCCI), has identified bogus lending rates and lean size of commercial bank loans, to manufacturing, as some of the factors militating against productivity in this very critical sector. Tagged, 'MCCI Q4, 2024, the new report revealed that 76 percent of the CEOs of member companies interviewed were of the strong view that bank lending rates, in the period under review, were rather too high, and, in consequence, never encouraged productivity during the period. The MCCI report also showed that operators in the sector believed the size of loans available to the sector was rather too lean to make any impact in the period under review, as 58.3 percent of those interviewed disagreed with the claim that the size of bank loans encouraged productivity during the period. According to the report, as a result of further hike in the benchmark interest rate from 27.25 percent in September, to 27.5 percent in November 2024, manufacturers experienced increases in bank lending rates during the reviewed period, with most charging manufacturers between 35 percent and 48 percent in Q4, 2024. 'The exorbitant cost of borrowing has drastically constrained the sector's access to credit,' the report stated. Related News FG strengthens loan access for small business owners FG secures $1.1bn AfDB loan Housing loan: FMBN disburses N455.132bn in 42 years Operators in the sector also gave thumbs down, regarding the impact government expenditure really had on the sector's productivity, since only 37.2 percent of manufacturers interviewed believed such impact was strong on the sector, during the period. On the operating environment, the operators identified multiple regulations, multiple taxes, high energy costs, access to the national ports, local sourcing of raw materials, inventory of unsold goods and lack of patronage of locally-made goods by government MDAs, as some of the factors that made the environment hostile to manufacturing in the reviewed period. For instance, 83.3 percent and 86.1 percent of manufacturers interviewed believed over regulation and multiple taxation by the government, depress manufacturing productivity, respectively; 63.2 percent insisted port gridlocks were also a huge issue to contend with during the period in the sector Further analysis into the period also revealed a surge in production and distribution costs by 18.2 percent in the quarter, while the period also witnessed a further contraction of capacity utilisation by 0.8 percent in the sector. The report also revealed a dip, by 1.2 percent, from a contraction of 3.2 percent in Q3 2024, in the volume of investment that went into the sector in Q4 2024. The report, however, indicates a favourable change in sales volume recorded during the period. On the sector's outlook in 2025, the report described the sector as standing between the crossroads of optimism and reality checks. '2025 is a pivotal year, and the outcome will be crucial for this most significant sector. The exorbitant electricity tariffs hike, high exchange rate, multiple taxation, high interest rate, low credit access and insecurity remain some of the top challenges of manufacturers,' it stated. READ ALSO: $750m SABER programme: 33 states, FCT sign subsidiary loan agreement
