The Confidence Index of the Chief Executive Officer (CEO) of the Manufacturers Association of Nigeria (MAN) fell to 51.9% in the second quarter of this year.
According to the MAN CEO Confidence Index (MCCI) report, MAN President Mr. Francis Meshioye stated that the index declined from 53.5% recorded in the first quarter of 2024.
The MCCI serves as a gauge for assessing quarterly shifts in manufacturing activities, influenced by macroeconomic trends and government policies.
This index compiles the perspectives of 400 CEOs from manufacturing companies across Nigeria’s six geopolitical zones, focusing on various economic factors such as business conditions, employment levels, production rates, and the overall operating environment.
Meshioye highlighted that the contraction in the MCCI reflects the challenging times faced by the manufacturing sector. He noted that all current indicators of manufacturers’ confidence have declined due to steep increases in electricity tariffs, aggressive hikes in interest rates, a high exchange rate, and ongoing inflationary pressures.
Additionally, the recurring fuel shortages and the disruptions caused by the National Labour Congress’s industrial action have exacerbated the situation.
Meshioye expressed concern that Nigeria’s journey toward sustained industrialization and steady economic growth is at risk, as the numerous challenges hindering the manufacturing sector’s performance receive insufficient attention.
He called on the government to implement measures to address these critical issues, which are eroding manufacturers’ confidence and diverting the country from a path of sustainable and robust growth.
He said, “Government must insulate the productive sector from the impact of continuous hike in the monetary policy rate by ensuring the disbursement of the N75 billion single digit loan approved by President Bola Tinubu, GCFR over a year ago for the manufacturing sector.”
“MAN recognises the efforts made by the Monetary Policy Committee (MPC) to stabilise prices and observes the rationale behind its decisions.”
“Clearly, the capacity of the manufacturing sector to play its strategic role of stimulating economic growth is further constrained by the increase in interest rate. However, it is expedient that the survival of manufacturing in Nigeria is prioritised when making monetary policy decisions.”
CBN should study the impact of previous MPC decisions on inflation and businesses
He also called on the government to instruct the Central Bank of Nigeria (CBN) to conduct a thorough assessment of how past decisions by the Monetary Policy Committee (MPC) have influenced the inflation rate over the past five years.
This analysis, he emphasized, would provide valuable insights to guide future MPC decisions.
Meshioye urged the CBN to focus on supporting domestic production by reconsidering the continuous increases in the Monetary Policy Rate (MPR) and allowing the real sector sufficient time to recover from the effects of previous hikes.
Additionally, he recommended that the CBN work closely with the Coordinating Minister of the Economy to ensure better alignment and coordination between monetary and fiscal policies.
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