Mr. Lanre Popoola, a representative of the Manufacturers Association of Nigeria (MAN), has emphasised the pressing need for the federal government to bolster the viability of the agriculture sector.
Speaking from Ibadan, Popoola, who serves as the association’s Branch Chairman for Oyo, Osun, Ekiti, and Ondo States, underscored the significance of this action in ensuring a consistent supply of raw materials for the manufacturing industry.
He pointed out that over the past 12 years, the manufacturing sector has faced a downward trajectory, primarily attributed to a range of recurring issues that continue to plague the industry. Popoola lamented that these underlying problems remain unaddressed, resulting in a detrimental impact on the sector.
Popoola highlighted the historical challenges associated with accessing foreign exchange (forex) for importing raw materials. He noted that difficulties in this regard led manufacturers to explore alternative markets to fulfill their material requirements. The current scenario, where forex acquisition for raw materials involves high costs, translates to an elevated cost of goods that may not align with consumer affordability.
The chairman elaborated on the cascading effects of this situation: reduced sales could prompt manufacturers to cut costs, which in turn might lead to decreased production and even workforce layoffs. Such a chain reaction could significantly contribute to unemployment and threaten the industry’s stability, thereby affecting the broader economy.
Popoola identified unfavorable government policies concerning forex allocation, power supply, and agriculture as pivotal factors driving the manufacturing sector’s decline in Nigeria. He pointed out that the removal of fuel subsidies and the departure of foreign industries from the country have compounded these challenges, contributing to increased inflation rates. This, in turn, has eroded people’s disposable income, thereby diminishing their purchasing power.
Citing a phenomenon termed the ‘Sachet Economy,’ Popoola noted that companies have resorted to producing goods in smaller quantities to cater to the changing consumer landscape where affordability is crucial. This adaptation has been driven by the necessity to survive challenging circumstances.
He called for a more effective management of Nigeria’s resources, including the rehabilitation of refineries to enable the country to export petroleum products. Additionally, Popoola stressed the importance of facilitating the circulation of sufficient funds within the economy.
Popoola expressed MAN’s optimism that forex rates would stabilize at levels conducive to the manufacturing industry’s needs. He highlighted the potential for collaboration between the government and the private sector to achieve these goals and create an environment conducive to sustainable growth.
Between Depleting Workforce And Declining Productivity