Nigerian manufacturers have listed the top challenges they face in manufacturing goods in Nigeria. NOI polls, Nigeria’s leading polling agency in partnership with CSEA (Centre for the Study of the Economies of Africa) found out about these challenges in a survey released today, 24 August 2016.
Manufacturers say that the Unavailability of Petrol and Diesel, Poor Power Supply, Policy inconsistency, and Limited Access to Credit are their major challenges in Nigeria.
Majority of the manufacturers also noted that compared to one year ago, the availability of Petrol/Diesel (80 percent), Power supply (73 percent), Policy inconsistency (55 percent), and Access to Credit (49 percent) have worsened.
Also about 78 percent of companies surveyed said that they have been negatively affected by the disparity in foreign exchange rates (in the official and parallel markets). The impact of the foreign exchange shortage applied across all companies no matter their size, an indication of the import dependency of the Nigerian manufacturing sector.
The Organised Private Sector (OPS), the umbrella body for players in the private sector recently disclosed that more than 200 companies have been forced to close shop in the last one year because of the challenges they have had in accessing foreign exchange in the last one year.
The survey found out that 52 percent of sampled companies disclosed that they are highly dependent on imported inputs in their production, but only 25 percent indicated that the export market was highly important to their turnover.
Majority of sampled firms (60 percent) also decried the lack of support within their current business environment; with at least 90 percent of the firms not operating up to their optimum installed capacity, and 45 percent operating below 60 percent of installed capacity.
Surprisingly, the survey also found out that despite the challenges, Nigerian Manufacturers are upbeat and have a positive outlook on the economy over the next one year, with 76 percent expecting economic conditions to improve.
A total of 205 manufacturing companies were polled from all geopolitical zones of the country. This comprised of 98 small companies (10-49 employees), 69 medium companies (50-199 employees) and 38 large companies (200 or more employees). Also 19.1 percent of the companies surveyed make turnover below N1 million, 29.4 percent make turnover of N1-10 million, 24.2 percent make turnover of N11-50 million, 6.7 percent make turnover of N51-100 million, 7.2 percent make turnover of N101-500 million, 9.8 percent make turnover of N501 million-1 billion, and 3.6 percent make turnover above N1 billion. The survey was conducted in May 2016.