According to the results of the Manufacturers Association of Nigeria (MAN) CEOs Confidence Index (MCCI) survey for the second quarter of 2023, a significant proportion of manufacturers in Nigeria, approximately 63.1 percent, believe that the government’s capital expenditure initiatives do not effectively foster productivity within the manufacturing sector.
This sentiment comes as the confidence levels among CEOs in this sector continue to decline. The survey, which is conducted by MAN on a quarterly basis, offers insights into how manufacturers perceive the macroeconomic landscape.
The report highlights that the MCCI aggregate index score for Q2’23 dropped by 1.4 points to reach 52.7 points, as compared to 54.1 points recorded in the first quarter of the year.
Survey reveals manufacturers’ top concerns and calls for infrastructure investment
This decline is also 2.3 points lower than the score of 55.0 points reported in Q4’22. The survey additionally allowed manufacturers to identify and rank the most pressing challenges faced by the manufacturing sector.
The cost of energy emerged as the foremost concern, followed closely by high credit costs, insufficient access to funds, burdensome taxes, and difficulties with raw material acquisition, including delays and high costs.
MAN’s Director General, Segun Ajayi-Kadir, emphasized that government capital expenditure should focus on improving economic infrastructure, such as transportation, electricity, and water supply, which are vital for supporting industrial businesses.
The absence of robust economic infrastructure contributes significantly to the elevated operational costs faced by manufacturers, hampering the growth of the sector.
Ajayi-Kadir stressed the importance of aligning fiscal and monetary policies to create a stable macroeconomic environment, fostering a conducive atmosphere for productivity and enhancing the overall ease of doing business in Nigeria’s manufacturing sector.