Nigeria’s manufacturers brace for bumpy ride in 2024, foresee rough first half

Nigerian manufacturers are eyeing a bumpy road ahead in 2024, bracing for a potentially challenging first half despite an overall optimistic outlook for the year. 

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The Manufacturers Association of Nigeria (MAN) issued a sobering forecast in its “Manufacturing Sector Outlook for 2024,” predicting a tough few months before potential improvement later in the year.

One major concern looming large is the lingering issue of a $7 billion foreign exchange backlog, hampering imports of crucial raw materials and equipment. MAN is urging the Federal Government to prioritize clearing this backlog as a critical step towards easing production bottlenecks and fueling industrial growth.

Despite the initial hurdles, the report paints a cautiously optimistic picture for the overall year. Sectoral real growth is projected to reach 3.2%, solidifying manufacturing’s significant contribution to the Nigerian economy, expected to exceed 10%. Additionally, the report predicts a gradual rise in the Manufacturers’ CEOs Confidence Index, potentially surpassing 55 points by the end of the fourth quarter, indicating growing industry optimism.

While acknowledging the initial challenges, MAN highlights several potential catalysts for recovery:

• Improved access to forex: Clearing the backlog and implementing forex market reforms are crucial for smoother production processes.

• Government interventions: Targeted policies and incentives aimed at boosting local competitiveness and supporting infrastructure development can provide a vital lifeline.

• Increased domestic demand: Consumer spending, fueled by a potential economic rebound, could translate into higher demand for local goods, benefiting manufacturers.

The report urges a proactive approach from both the government and industry players to navigate the initial turbulence and capitalize on the anticipated upswing. 

Collaborative efforts to address foreign exchange constraints, enhance infrastructure, and foster innovation will be key to ensuring a robust and sustainable manufacturing sector in the years to come.