Categories: Business

Diesel Hike, Energy Crisis May Cause Job Losses, Nigerian Manufacturers Warn

The Manufacturers Association of Nigeria (MAN) has appealed to the federal and state governments to protect industries from the erratic power supply and hike in price of diesel across the country.

The Chairman Kwara/Kogi branch of MAN, Bioku Rahmon, stated this on Monday in a statement. He called for expedited rescue of players and investors from the imminent orgy of unemployment and mass closure of companies that is imminent due to the energy crisis. He expressed concern that the manufacturing industry was yet to fully recover from the monumental strangulations occasioned by COVID-19 pandemic, while describing the subsisting energy crisis as the exact antithesis of what the industry can’t contain at this time.

He lamented that electricity generated from the national grid had recorded no improvement and was hampering the activities of MAN. MAN urged the state and federal governments to save the manufacturing sector from imminent collapse, which according to him could be a major catastrophe to the already bad economy.

It asked that interest rates on industrial loans be reduced by commercial banks, the widening of the foreign exchange windows to industries and a drastic reduction of interest rates as done with the COVID-19 era palliatives to 2.5 percent.

“Renewed wave of inflationary pressures further plunged the buying masses into extreme depths of poverty with concomitant erosion of customers’ Disposable Income (DI) and hence culminated in low patronage of our industrial finished products.

“Foreign Exchange (FX) scarcity has worsened significantly, even as industry players continue to experience a sharp and growing shrink in the FX windows. This has led to major downturns and stress in the purchase and acquisition of foreign components for production,” MAN said.

It noted that the epileptic power supply have long resulted to sharp depletion in the Key Performance Indicators (KPI) of the manufacturing industry such as capacity utilisation, unsold goods inventory, and sector contribution to National Gross Domestic Product (NGDP) especially since 2020.

Rahmon, appealed to government to initiate measures that would address the challenges, noting that last year the unfriendly operating environment and inconsistent business and investment policies of government further paralysed the manufacturing industry leading to weak results in the sector, all of which were further exacerbated by the COVID-19 pandemic.

The association urged the Kwara State government to rescue manufacturers by installing a gas-powered energy distribution plant that will exclusively supply power to industries while the CBN should give directives to commercial banks to reduce interest rates on industrial loans.