By Charles Okonji
The Manufacturers Association of Nigeria (MAN) has stated that the floating exchange rate policy implemented by the Central Bank of Nigeria (CBN) has resulted in a steep depreciation of the Naira, which fell from ₦666/$ in mid-2023 to over ₦1700/$ by mid-2024.
The President of MAN, Otunmba Francis Meshioye, who stated this at the 2025 MAN Personality of the Year Award/Presidential Media Luncheon held in Lagos on Wednesday, noted that the depreciation inflated the costs of imported raw materials and machinery, worsening the already strained profitability of manufacturers.
Meshioye lamented that the massive loss of the value of Naira further aggravated the already escalated inflation rate, adding that it led to high accumulation of inventory as the consumers experience weak purchasing power.
According to him, “Inflation in Nigeria reached an alarming 34.6% by November 2024, diminishing consumers’ purchasing power and causing a decline in demand for manufactured goods. This inflationary burden also led to an accumulation of unsold inventory, which rose to N1.4trillion across the manufacturing industries.
“Interest rates reached unprecedented levels, climbing to 27.7% by November 2024. This increase substantially raised borrowing costs, making it harder for manufacturers to access financing for expansion and modernization. The rising interest rates, combined with inflation, severely limited the potential for investment in the sector, impeding long-term growth prospects.”
Commenting on poor infrastructural state of the manufacturing sector and the country in general, MAN President said,” any country that fails to develop its manufacturing sector will end up importing poverty.”
Regrettably, he said that manufacturers were hit hard with a drastic rise in electricity tariffs, stressing over 250% percent increase was suicidal.
“This surge in energy costs became one of the highest operating expenses for businesses in the sector in 2024. As a result, many manufacturers sought alternative energy sources, further straining their financial resources and complicating their ability to remain competitive,” he averred.
Meshioye expressed that Nigeria’s manufacturing sector encountered a myriad of macroeconomic and infrastructural challenges that severely impacted its performance in the year, 2024.
“The sector faced mounting pressure from high inflation, a depreciating Naira, rising interest rates, escalating electricity tariffs, record low sales, multiplicity of taxes and levies and militating security concerns. These factors collectively strained the sector’s profitability and curtailed its contribution to the nation’s GDP.
Consequently, it cannot be far-fetched that the sector’s struggles were reflected in its decreasing contribution to Nigeria’s GDP. Manufacturing’s share of the economy dropped significantly from 16.04% in Q4 2023 to 12.68% in Q2 2024, indicating a contraction in economic activity within the sector. The combination of high operational costs, reduced consumer demand, and limited access to finance contributed majorly to this decline.” He explained.
On his part, the Director General of MAN, Mr. Segun Ajayi-Kadiri, stated that the precarious state of the economy has presented a good reason for the country to buckle up.
According to him, MAN must continue to collaborate with other stakeholders, government, private sector, international agencies in order to continuously improve on the country’s business environment.
Ajayi-Kadiri, noted that there was no need to worry about the economic policies the 49th American President, Donald Trump, as it is an opportunity for the country to look inwards and guard its economy by putting Nigeria first in every decision.
He noted that countries such as Germany, Russia and China among others are realigning their trade policies, working on their foreign policies, to be able to engineer a process that insulates the economy from the ravaging affects of the current US economic policies when implemented.
“Recently, we had an addition of somebody who the world is worried about, and we have started by even thinking about how we will create a structure to tax, more or less influence the tax structure of other countries,” The MAN DG averred.
