Nigeria’s manufacturing confidence shows modest uptick amid ongoing economic challenges
Nigeria’s Manufacturing CEOs’ Confidence Index (MCCI) recorded a slight increase of 0.5 points in the fourth quarter of 2024, rising from 50.2 points in Q3 2024 to 50.7 points.
The report, released by the Manufacturers Association of Nigeria (MAN) and signed by its Director-General, Mr. Segun Ajayi-Kadir, provides a snapshot of manufacturing operators’ perceptions and quarterly trends in the sector.
The survey, which polls 400 CEOs from manufacturing companies across Nigeria’s six geopolitical zones, revealed that key indices such as business conditions, employment, and production levels showed some improvement, driven by moderate increases in consumer demand, particularly during the festive season.
Despite this, all three indices remained below the 50-point threshold, reflecting the challenges posed by a tough macroeconomic environment.
The report highlights that while business, employment, and production conditions saw modest upticks, factors such as the high cost of raw materials, energy, and logistics, alongside unfavorable exchange rates, interest rates, and inflation, continue to impede overall manufacturing operations.
Looking ahead, the report projects that these indices will rise above the 50-point threshold in Q1 2025, although confidence in the sector remains cautious. The projected business condition for the first quarter of 2025 dropped slightly from 56 points to 53.2 points, while employment and production expectations also saw slight declines.
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Manufacturers expressed hope for a more stable exchange rate, a freeze on interest rate hikes, reduced energy costs, and the passage of tax reform bills in the first quarter of 2025, which they believe could foster a more favorable business climate.
Sectoral performance varied, with seven out of ten industry groups reporting improved confidence levels. Among the notable increases were sectors like Pulp, Paper, Paper Products, Printing, Publishing, & Packaging, and Food, Beverages & Tobacco, which saw confidence rise from Q3 2024.
Conversely, sectors such as Basic Metal, Iron & Steel, and Electrical & Electronics experienced slight declines in confidence.
While manufacturers remain optimistic about the future, the report suggests that a stable macroeconomic environment is crucial for sustaining and building upon these confidence levels in the coming quarters.
