The outlook for Nigeria’s manufacturing sector in the fourth quarter of 2024 appears grim, according to the Manufacturing Association of Nigeria (MAN). In a recent interview with The PUNCH, Director General Segun Ajayi-Kadir expressed deep concerns about the continuing struggles faced by manufacturers due to escalating costs and declining sales.
Ajayi-Kadir noted that despite initial hopes for a recovery in the second half of the year, the sector has instead experienced persistent challenges, stating, “Earlier in the year, we imagined that the second half would be better… But rather than experience an upswing, we have continued to have a depression.” This assessment comes on the heels of disappointing performance metrics for the manufacturing sector in the third quarter.
Key factors contributing to this bleak outlook include rising interest rates, soaring diesel prices, and increased electricity tariffs. These economic pressures have severely impacted the manufacturing sector, which contributed 8.46 percent to Nigeria’s real gross domestic product (GDP) growth in the second quarter of 2024. This marks a decline from 8.62 percent in the same period last year and a significant drop from 9.98 percent in the first quarter of 2024.
Ajayi-Kadir emphasized the compounding effect of these challenges: “The interest rate has continued to be increased, the exchange rate didn’t improve, and we had an increase in electricity tariff,” he stated, underscoring how these factors have combined to stifle growth within the sector.
With the outlook for Q4 2024 looking increasingly uncertain, stakeholders in the manufacturing industry are calling for urgent policy interventions to alleviate these pressures. Industry experts warn that without significant support and relief measures, the manufacturing sector may struggle to regain its footing, potentially hampering overall economic recovery in Nigeria.
