The manufacturing industry in Nigeria has been significantly impacted by the floating of the naira in 2023, with many companies experiencing financial distress.
The Chairman of the Ogun State Manufacturers Association of Nigeria (MAN), George Onafowokan, expressed grave concerns about the current state of the sector during the 39th Annual General Meeting of the Ogun State branch.
Onafowokan revealed that 16 major manufacturing companies have collectively lost a staggering N792 billion due to the depreciation of the naira.
He pointed to the surge in the exchange rate, which reached NGN1,900 to $1 by early 2024, as a critical factor driving the sector’s struggles. “This policy move has caused a severe forex scarcity, making it nearly impossible for manufacturers to access affordable dollars for essential imports,” he explained.
As official foreign exchange reserves became limited, many manufacturers turned to the parallel market, where the dollar soared to NGN900, pushing up production costs.
This increase has placed immense financial pressure on businesses reliant on imported raw materials and machinery. Consequently, several manufacturers have had to reduce or even stop their operations.
Onafowokan also highlighted the challenges posed by poor infrastructure and rising energy costs, especially in Ogun State, where critical roadways remain in poor condition. These issues contribute to higher logistics costs and frequent accidents.
He urged the Ogun State government to speed up infrastructure improvements and also called for reforms in the tax system. Additionally, he proposed a “Buy Made-in-Nigeria” initiative to boost local demand and provide relief to the manufacturing sector.
