Indeed, the private sector plays a vital role in the Nigerian economy in terms of revenue generation, strategic partnerships, job creation, investment facilitation and trade promotion, among others.
In particular, the private sector represents more than 80% of all economic activities in the country. It is therefore imperative to ensure an investor-friendly operating environment in the economy.
However, it is unfortunate that the fiscal and monetary policies of the governments which were meant to stimulate many businesses in the country, at the same time stimulating aggregate demand in the economies, have not been able to do much.
Indeed, it is undeniable that the emergence of the induced COVID-19 pandemic has played a major role in the negative trajectories that have affected the results of many companies in the country. This came to inform of a series of restrictions and lockdowns across all countries
Industry stakeholders also noted that many industrial enterprises could not access raw materials for production, including workers to produce immensely, forcing them to adopt a cost-reflective approach to overcome the stormy situation.
“Additionally, worsening security concerns in parts of the country have also forced production in some industries to contract as production bases remain under siege and supply chains are disrupted, leading to shortages. of goods in the markets. With the deteriorating perception of security in the country, some manufacturing companies have suffered heavy inventories of unsold goods in warehouses as logistics and transportation segments have been extremely affected in the distribution/delivery value chains. ‘supply.
“Furthermore, the Nigerian economy has faced several challenges for some time, including subdued trade and business activities across various sectors (as evidenced by the trend in PMI data), significant exchange rate pressures (as evidenced by the premium between official rates and parallel market rates), pressure on income from oil and non-oil sources, inflationary pressures, low purchasing power, low levels of employment, deteriorating internal security and low investor confidence. All of these challenges listed above have in one way or another affected the country’s productive sector as many factories have struggled to overcome the difficult situations” , they said.
According to the latest data from the National Bureau of Statistics, the Nigerian economy has slowed slightly from a growth of 5.01% in the second quarter of 2021 to a growth of 4.03% in the third quarter.
The President of the Manufacturers Association of Nigeria (MAN), Engr. Mansur Ahmed said that the government has embarked on many initiatives, reforms and policies that have helped to stabilize the course of manufacturing in Nigeria, stating that “the government must, however, maintain the implementation of policies that have helped the economy recover quickly from the recession, survive the onslaught of COVID-19, and revive other initiatives that suddenly stopped working.
“MAN is hopeful that the government will continue to make manufacturing a centerpiece of its economic agenda and the catalyst for increasing domestic production, employment and wealth creation. This is due to its very strong and productive links with agriculture, petrochemicals and solid mineral beneficiation.
Ahmed noted that “With the support of the government, we will accelerate the building of a resilient manufacturing sector in Nigeria for the best benefit of the economy and over 200 million Nigerians.”
The CEO of the Center for Promoting Private Enterprise (CPPE), Dr. Muda Yusuf, said that for the economic recovery to be sustainable, it is important to create an environment conducive to positive investor sentiments in the economy, saying that “this should be driven by politics, regulation, macroeconomic conditions and safety of life and property.
The Chief Executive Officer of the Nigerian Association of Chambers of Commerce, Industry, Mining and Agriculture (NACCIMA), Ambassador Ayo Olukanni, in a statement from the fourth chamber board meeting, said that NACCIMA was already collating data that would present the actual number of manufacturing companies in the country that went bankrupt due to insolvencies encountered while operating in a difficult business environment in the country.
He said this is intended to help stimulate private sector activity, working with member chambers, for advocacy, business development and trade promotion. These activities will focus on promoting market access opportunities, as well as developing an empirical report on the state of insolvent industries and factories in each state of the federation.
According to him, in fact, many manufacturing companies are experiencing unstable business amid high debt, distorted production machinery, illiquidity, shortage of foreign exchange and others forcing them to close up shop.