- From Blog Archive
Manufacturers seek lifeline to remain in business - NEW TELEGRAPH
BY Taiwo Hassan
The Manufacturers Association (MAN) has urged the Federal Government to urgently declare a state of emergency in the manufacturing sector.
Similarly, the chief executive officers of manufacturing companies in Nigeria emphasised that the country's manufacturing sector was indeed in a precarious state and requires a lifeline to recover fully from the impact of the pandemic.
Particularly, MAN noted that losses associated with the lockdown period and the multidimensional challenges of the post-lockdown operating environment severely impaired first quarter 2020 MAN CEOs Confidence Index (MCCI) aggregate index and the indexes of the various diffusion manufacturing factors to fall below the 50 points benchmark.
In addition, the association disclosed that findings among the CEOs showed that key manufacturing firms had been recording a daily revenue loss of N500,000 since the inception of the lockdown in the country.
President of MAN, Mansur Ahmed, confirmed these in a survey by the association for first quarter 2020 MCCI aggregate Index in Lagos.
Ahmed said that the lockdown had significantly destabilised business and economic activities, especially in the manufacturing, informal and MSMEs space, given their lack of adequate cash buffers to withstand the shock.
He disclosed that the association's findings from its survey on the COVID-19 crisis impact on the Lagos business community revealed that 81 per cent of its respondents were 'severely' affected by the pandemic with median daily revenue loss of N500,000.
According to him, the fundamental effects are too alarming in the country's manufacturing sector, urging government to come in and rescue local manufacturers by declaring a state of emergency in the sector as the sector urgently needs a lifeline as a ventilator to swiftly return it to the path of sustained production.
Speaking further, the MAN helmsman explained that some of its members owed banks huge debts running into billions of naira, while others can no longer service their loans from commercial banks.
Consequently, Ahmed noted that with this situation, the repercussions are that more firms would go under, massive job losses, salary cuts and force majeure are imminent.
Speaking on the MAN survey outcome, Ahmed said: "The MAN CEOs Confidence Index (MCCI) was created by the Manufacturers Association of Nigeria (MAN) as a quarterly instrument for measuring changes in macroeconomic trends, operating environment and selected diffusion factors relevant to the manufacturing sector.
"The chief executive officers of manufacturing concerns in Nigeria are the respondents to MCCI survey and the index seeks to measure their pulse on the economy with a view to ascertaining their level of confidence in the prevailing economic policies, regulatory guidelines and manufacturing operating environment in Nigeria.
"A section was created in the survey instrument to examine the initial implications of Coronavirus code-named COVID-19, which was recently declared a pandemic by the World Health Organization (WHO), on selected manufacturing sector performance indicators.
"COVID-19, which broke out late 2019, has been spreading widely like fire causing enormous pains and deaths across the world with devastating effects on the economies of many countries.
"Fundamentally, the first quarter 2020 MCCI aggregate index and the indexes of the various diffusion factors all fell below the 50 points benchmark, which, therefore, shows the manufacturing sector is indeed in a precarious state and requires a lifeline to recover fully from the impact of the outbreak of COVID-19; losses associated with the lockdown period and the multidimensional challenges of the post lockdown operating environment.
"It is, therefore, extremely important and urgent for the government to declare a state of emergency in the manufacturing sector and immediately place the sector on an integrated policy ventilator through the provision of a comprehensive support system and stimulus packages to swiftly return the sector to the path of sustained production."