The Manufacturers Association of Nigeria has said 95 per cent of local manufacturers agreed that multiple taxes and levies and overregulation by government agencies persisted in the second quarter of this year.
According to its Manufacturers Confidence Index for Q2 2021, manufacturers in the country suffer multiple regulation on a single manufacturing process occasioned by the agencies of the federal, state and local governments.
“Majority of respondent, 95 per cent, agreed that multiple and overregulation by government agencies have depressing effect on manufacturing productivity. Three per cent of respondents are not sure while the remaining two per cent simply disagreed,” MAN said.
The MCCI is an index created by the association to gauge the change in quarterly pulsation of manufacturing activities to changes in the macroeconomic ambience and Government policies. The survey covered 400 chief executive officers of MAN member-companies.
MCCI has a baseline index of 50 points which suggests a stationary point in the economy. Any index point above 50 points indicates that manufacturers have confidence in the economy and improvement in manufacturing performance, while any index point below 50 points indicate otherwise.
MAN highlighted challenges such as forex difficulties, unfriendly lending rates, discouraging government expenditure targeted at manufacturers, issues at the port and inefficiency in the backward integration agenda.
“With the Monetary Policy Rate standing currently at 11.5 per cent, there may not be credible reason the average lending rate to manufacturers by the banks is still as high 22 per cent as revealed by MAN survey of the sector,” it said.
According to the report, 62 per cent of manufacturers reported that their cost of production increased and that cost of shipping also increased due to the COVID-19 pandemic impact.
The aggregate MCCI rose to 52.9 points from 49.1 points in the previous quarter, signaling an improvement in the confidence of manufacturers in the economy.
However, most of the respondents said the macroeconomic indicators did not have an effect on the capacity utilisation in the sector, volume of production, new investments and employment rate.
