Against the backdrop of the steady rise in inflation rate, the Manufacturers Association of Nigeria has called on the Federal Government to provide priority allocation of foreign exchange and special credit window to the manufacturing sector.
“The news of rising inflation in a country that is only recovering from recession is worrisome. It is more so for the manufacturing sector that remained in recession, even after the technical exit of the country’s economy,” the Director-General, MAN, Mr Segun Ajayi-Kadir, said in a statement on Friday.
He noted that the manufacturing sector posted a growth rate of -1.51 per cent in the fourth quarter of 2020 and -1.52 per cent in Q3 of the same year.
The National Bureau of Statistics disclosed on Thursday that the inflation rate rose to 18.17 per cent in March from 17.33 per cent in February.
Ajayi-Kadir said, “The 18.17 per cent inflation rate is not healthy for the wellbeing of the people and the growth aspiration of the economy. It should therefore be properly managed before it spirals out of control.
“The current inflationary condition in Nigeria adversely affects the profitability of sector. Clearly, there is an urgent need for government to intentionally ensure price stability before the situation becomes deplorable.”
According to him, there is a strong relationship between manufacturing sector growth and inflation rate, just like exchange and interest rates.
“Therefore, in the immediate, government should assist manufacturing productivity with credit at competitive price. This could be in the form of enhancing existing special credit windows or creating additional ones for this important sector of Nigerian economy,” he said.
Ajayi-Kadir said the government should ‘give priority allocation of forex to manufacturers to import inputs that are not locally available and for which there are no immediate plan or resources to produce locally’.
“Since policies are dynamic, they could change as soon as we develop local capacity,” he added.
He said the government should pursue consumer price stabilisation measures that would stimulate growth in agricultural output and support the manufacturing sector to guarantee improved output that could engender the reduced intensity of too much money chasing after fewer goods.