820 manufacturing companies close down in 9 years- MAN

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By Franklin Alli
Manufacturers Association of Nigeria (MAN), has declared that 820 manufacturing companies have closed down in the past nine years of civilian rule and rendered thousands of people jobless, even as the Federal Government said the solution may not be very quick in coming .

Udenwa

Udenwa

Addressing top government functionaries, policy makers and industrialists from across the country,  during the 37th annual general meeting of MAN, in Lagos, MAN President , Alhaji Bashir Borodo, disclosed that between 2000 and 2008 about 820 manufacturing companies have closed down or temporarily suspended production, and urged the Federal Government to take pragmatic steps to save the sector from imminent total collapse.

He blamed the growing closure pattern that is on the increase in our industrial landscape on tough operating environment that is characterised by unstable electricity, high interest and exchange rates, smuggling, high cost of AGO and LPFO to power their generators or boilers including multiple taxation and levies slammed upon the manufacturers by the tiers of government, etc.

“The lesson of the past few years have shown that if local manufacturers are to survive in a globalized world, the provision of energy can not be compromised particularly in our peculiar situation where the upgrading of energy production had suffered almost 30 years of neglect.  From all account, the level of investment required to reverse the decay arising from prolonged neglect would be massive,” he said.

According to him, aside the problems of energy, other challenges faced by manufacturers have been compounded in the last 24 months by unfavourable terms of credit to the sector.  “Manufacturers continue to groan under the high interest rates and lack of long term credit.

Similarly, in the last six months, macro-economic indices were disrupted when the exchange rate of the Naira fell suddenly by almost 20 per cent after a relatively long period of stability.The combined effect of high interest rates and devaluation of the currency which hike inflation.

Fielding questions on relocation of industries to neighbouring countries such as Ghana, Borodo noted that it is a very worrisome development.

“This unfortunate trend is a matter of serious concern and should be halted in view of Nigeria’s unchallenged leadership role as the hub of industrial production in West Africa.  It should be noted that no national industrialist would wish to ignore Nigeria’s market with its strength and potentials.  We also need to acknowledge that this development is the outcome of breakdown in infrastructure.

This is a wake up call for Nigeria to remove infrastructure road blocks and provide incentives.  The reality is that notwithstanding the relocations already effected and others that may follow, the obvious and primary market target of these industries remain Nigeria.”

He urged the Presidency to take pragmatic decisions and political will to implement the 7-point Agenda and Vision 20: 2020, as this will provide veritable platforms to harness the best of Nigeria and transform it in the shortest time possible.

Minister of Commerce and Industry, Chief Achike Udenwa, acknowledged that power is the major problem facing manufacturers in the country, stressing that the Federal Government is determined to achieve the 6000 MW targets by the end of this year.

The government, he maintained, hoped to achieve this by vigorously implementing all projects under the National Integrated Power projects(NIPP).  This, he believes will bring some measure of succor to Nigerians and manufacturers, and progress will be made. “Be rest assured government is behind you.  We really feel your pain.  If there is no manufacturing industries, my ministry will cease to exist.  The solution may not be very quick in coming, yet government is addressing them,” he said.

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