Manufacturers: Unfavourable exchange rates counterproductive….NO1Polls

identifies worsening business environment

Nigeria’s prime economic development survey, NO1Polls has identified that unprofitable exchange rates has remained inimical to the evolution of the nation’s manufacturing sector.
In its recent poll: “The 2017 Manufacturing Sector Survey conducted by NOIPolls and CSEA, It was pointed that unfavourable foreign exchange rates, which ranked 55 per cent in its survey , has continued to dampen efforts targeted at growing the Nigerian manufacturing sector.

According to the report, 74 per cent of manufacturing companies said that business environment has been unsupportive in 2017; representing a 14-point increase from the 2016 result which stood at 60 percent. Thus, indicating a worsening of the business environment.
Also, lack of infrastructure, red-tapism and corruption were further fingered as some of the structural bottlenecks frustrating business environment.
In the report, 85 per cent of manufacturing companies surveyed are not operating up to 75 per cent of their installed capacity. A development that was attributed to many factors including weak demand which stood at 69 per cent, poor power supply at 58 percent, petrol/diesel unavailability 38 per cent and limited access to foreign exchange 26 per cent.
The report showed that almost half of the companies interviewed, 48 per cent of them considered importation of raw materials critical to their production. This category are mainly medium to large manufacturing companies, with up to 62 percent of inputs imported.
In the result, 75 per cent of manufacturing companies say the disparity in foreign exchange rates has had negative impact on their operations. Similarly, 80 per cent of the companies affirmed that inflation has had a negative effect on their businesses.
All the manufacturing companies interviewed affirmed that the recession had impacted their business operations and profitability; with 70 per cent stating that the recession had impacted their businesses negatively.

However, on the issue of bad roads, the survey rated the South-West 59 percent; South-South 49 percent; North-Central 46 per cent; and South-East, 43 per cent- the most affected regions with poor state of roads.
Lamenting the poor state of roads in the country, manufacturers drew attention to Apapa-Tin Can Access road, Lagos-Ibadan express road, Benin-Ore road, Oyo-Ogbomosho road in South West and East-West road.
The bad roads identified by the pool include, Benin-Agbor road, Aba-Port Harcourt road (South-South), Ajaokuta-Ayangba-Nsukka road, Lokoja-Ajaokuta road, Obajana-Okene road, Makurdi-Enugu road (North-Central and South-East) amongst others.

Bonny Amadi