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Poor power, diesel supply, others hampering manufacturing industry — NOI Polls

By Michael Eboh,

ABUJA— Manufacturers in Nigeria have identified the unavailability of petrol and poor power supply as the main challenges hindering the growth and threatening the survival of the industry, according to a latest survey by NOIPolls.


In the report of the survey released, yesterday, in Abuja, manufacturers that participated, also cited policy inconsistency and limited access to credit as some of the challenges faced by operators in the industry.

According to the poll report, majority of the manufacturers surveyed stated that,compared to one year ago, the availability of petrol/diesel, power supply, policy inconsistency, and access to credit have worsened.

The report further stated that about 78 per cent of companies surveyed revealed they had been negatively affected by the disparity in foreign exchange rates, in the official and parallel markets.

This, the report said, cut across the different company-size categories as, large, 83 per cent; medium, 76 per cent; and small 78 percent indicated this negative impact of forex.

It stated: “This finding is particularly poignant as 52 per cent of sampled companies disclosed that they were highly dependent on imported inputs in their production, and only 25 per cent indicated that the export market was highly important to their turnover.

“Furthermore, a majority of sampled firms, about 60 per cent, decried the lack of support within their current business environment; with at least 90 per cent of the firms not operating up to their optimum installed capacity, and 45 percent operating below 60 percent of installed capacity.”

However, the report noted that manufacturers were upbeat and had a positive outlook on the economy over the next one year, with 76 per cent expecting economic conditions to improve.

Specifically, the NOIPolls report stated that among the companies sampled, about 60 percent considered the current business environment unsupportive; with only 31 percent stating that the environment was supportive.

Further analysis on a geographical basis showed that while 93 per cent of companies in the North-East, 73 per cent in the North West and 68 per cent in the South East found the business environment unsupportive; only 65 per cent of companies in the South-West seem to suggest that the business environment was somewhat supportive.

In addition, the survey showed that the prevailing business situation in the country is not impressive, as at least 45 per cent of manufacturing companies stated that their current business environment was bad and 12 percent stating that it was neither good nor bad.

Only 43 per cent of companies, according to the report, described their situations as good or very good, ranging from a lowest rate of 18 percent in the North-Central to the highest rate of 78 percent in the South-West.

To this end, NOIPolls said: “The attention of all stakeholders – government, industry and development partners – need to centre on how to address the challenges of importation of manufacturing materials, the rising costs of energy inputs, and policy inconsistency.

“On the part of government, the following actions, which are not limited to implementing an input import substitution program, creating strategic FX window for manufacturing, reforming public finance institutions to improve access to credit, implementing modular refineries and implementing sound industrial policy should be highly considered to foster better growth in the future.

“In the same vain, manufacturers should deem it necessary to develop capacity for innovation and evaluate product value chains whereas, development partners could do more to support manufacturing in Nigeria by supporting long-term funding of the manufacturing sector and supporting the business environment reforms.”


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