THERE are strong indications that the manufacturing sector of Nigeriaâ€™s economy is rapidly going under as over 55 per cent of manufacturers closed shop in 2009 economic year.
The executive secretary, Manufacturers Association of Nigeria (MAN), Ikeja branch, Mr. Segun Ajayi- Kadir, told Sunday Vanguard that a greater number of MANâ€™s members currently out of business are mostly textile manufacturers.
He mentioned influx of foreign textile materials into Nigerian market and lack of infrastructure for efficient production as serious economic woes for the textile industry, which brought about reduced production capacity and sudden collapse.
Kadir, who lamented that the problem of textile industry in the country began over a decade ago, regretted that the problem is lingering without pragmatic steps to restructure the sector for it to thrive.
The MAN secretary expressed displeasure with the activities of some Nigerians who smuggle in foreign textile materials into the local market to the detriment of local manufacturers, saying such act is a disservice to the economy.
He explained that aside textile, the industrial sector generally is not maximising output, adding that epileptic power supply constitutes a major impediment to the growth of the sector. â€œWe are all aware of the power crisis in the country.
The manufacturers are the worst hit because they have to spend so much in generating their own power to carry out their operations. At the end of the day, the cost of production becomes very high and they find it extremely difficult to compete with their foreign counterpartsâ€, he said.
Kadir also said that some manufacturers affected spent huge sums to run their operations with limited access to funds, as a result of which they suffered cash crunch and crashed out of business.
â€œWhen entrepreneur spends so much money to purchase raw materials, pay for labour and the basic infrastructures are not available to enable him produce at a reduced rate, the tendency for him to increase his margin may not be there. A situation like this may not pave the way for the business to yield profits in the long-runâ€, he said.