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 commercial.banks 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.

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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.

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