By Bimbola Oyesola
The year 2024 has been described as a challenging year for manufacturers in Nigeria, citing the devaluation of naira, subsidy removal and currency instability as significant factors impacting the industry.
Managing director of Coleman Wires and Cables Industries Limited, Mr. George Onafowokan, in an interview with Daily Sun Workforce, explained how these economic challenges have adversely affected manufacturers across the country since May 2023.
He emphasized that the convergence of naira exchange rates, its ongoing instability, and the removal of fuel subsidies have all contributed to increase in transportation costs and general economic strain.
“There’s nobody who has not felt the negative impact on the economy. We have negativity almost literally everywhere,” Onafowokan stated.
He added that it has been a rough year for many manufacturers, while staying afloat requires hard work and the perception needed to ensure that business survives the hurdles.
“Can the situation improve? That’s the hundred-million-dollar question,” he said.
Onafowokan further expressed concern over the instability of the naira, which he said has made business planning nearly impossible.
He stressed the importance of manufacturers remaining hopeful despite the challenges, noting that losing hope would effectively mean shutting down operations.
He also highlighted the unique difficulties faced by manufacturers who do not have the luxury of sending workers home during tough times due to the significant investment in machinery and years of training. “The cost of training and retraining is not something you can do overnight,” he said.
Onafowokan mentioned a forthcoming intervention fund from the Bank of Industry (BOI), which could provide some relief to manufacturers. “BOI is coming with a N75 billion incentive, and they are expecting N650 billion to N1 trillion in an intervention fund. The sooner this fund is made available, the sooner it can help close the working capital gap created by devaluation.”
He, however, was cautious about the outlook for 2024, stating that while it might not be a brilliant year, timely intervention and better fiscal policies could significantly improve conditions for manufacturers.
He also called for the reduction of duties on raw materials and machinery to zero, emphasizing the need to streamline bureaucratic processes to facilitate easier importation.
When asked to rate the current government’s performance, Onafowokan gave them a score of 70 percent for effort but only 50 percent for deliverables, citing a gap between the decisions being made and the results being achieved.
He urged the government to do more to ensure that manufacturers can thrive despite the difficult economic environment.