767 industries shut down operations while 335 became distressed in 2023 in Nigeria – MAN
This surplus of unsold goods has further exacerbated the financial difficulties faced by manufacturers, as they struggle to generate revenue and maintain profitability. The closure of 767 industries and the distress of 335 others is a clear indication of the dire situation faced by the Nigerian manufacturing sector.
The instability of the exchange rate has been a major concern for manufacturers, as it directly impacts their ability to import raw materials and machinery at affordable prices. With the depreciation of the naira, the cost of importing these essential inputs has skyrocketed, making it increasingly difficult for manufacturers to remain competitive in the global market.
In addition to the exchange rate instability, increasing inflation has also posed significant challenges for manufacturers. The rising cost of living and the general increase in prices of goods and services have reduced consumer purchasing power, leading to a decline in demand for manufactured products. This decline in demand further contributes to the surplus of unsold goods and the financial distress faced by manufacturers.
Furthermore, the overall investment climate in Nigeria has deteriorated, making it less attractive for both domestic and foreign investors. The lack of a stable economic environment, coupled with the burden of high production costs and the imposition of the Expatriate Employment Levy, has created a hostile business environment for manufacturers. This has resulted in a decrease in investment in the sector, further exacerbating the economic crisis. In response to this the federal Government last week suspenedd the implementation of the Expatriate Employment Levy (EEL)
The Manufacturers Association of Nigeria has called on the federal government to address these challenges and implement policies that will support the growth and development of the manufacturing sector. They have emphasized the need for a stable exchange rate, measures to control inflation, and the removal of burdensome levies and taxes that hinder business operations.
In conclusion, the closure of 767 industries and the distress of 335 others in 2023 highlights the severe economic crisis faced by Nigerian manufacturers. The instability of the exchange rate, increasing inflation, and various other economic challenges have significantly impacted the sector. The imposition of the Expatriate Employment Levy has further added to the burden faced by manufacturers. Urgent action is needed from the government to address these challenges and create a conducive environment for the growth and sustainability of the manufacturing sector.
