NACCIMA Worries Over Ailing Firms

The Nigerian Association of Chambers of Commerce and Industry Mines and Agriculture (NACCIMA) has classified over 50 per cent of manufacturing companies operating in the country as “ailing industries” and are not getting  the needed life support.

National President of NACCIMA, Dr. Herbert Ajayi disclosed  this to The Tide Source during a paper presentation at a zonal workshop  on economic diversification organised by the Revenue  Mobilisation Allocation and Fiscal Commission (RMAFC) titled  “Reviving the manufacturing Industry in Nigeria”.

According to Ajayi, manufacturing  activities have declined in Nigeria due to the global economic meltdown which led to the closure of some industries, particularly those  which  depend  on importation to survive and had to spend foreign  currency on imported raw materials and spare parts.

He put the capacity utilisation of industries at between 30 per cent and 45  per cent with an average of 100 per cent overhead costs.

He also blamed the declined on political and economic factors, citing  poor infrastructure factors, citing poor infrastructure and epileptic power  supply as key impediments to the sector’s growth.

The NACCIMA boss disclosed that the manufacturing industry as a whole operates on more than 70 per cent of the energy it generates.

“Using generators greatly increase  the cost of manufacturing  goods,” he said.

The industrialist listed  other reasons for the woes in the sector to include incessant increase in the price of petroleum products used by industries, multiple taxation, unabated smuggling and inadequate access to finance, both locally and abroad.

According to him, widespread insecurity  and the inability of government agencies in the ports to meet its 24-hour targets for cargo clearance was also a contributing factor to the dwindling fortunes in the manufacturing sector.

He said current government policies to reviving the manufacturing industry was inadequate.

“For instance, in May 2010, the government announced a $1.3 billion fund to help banks extend credit to  the sector following the decline in available finance after the global economic  crisis  set in.

“Notwithstanding this, positive development arising from the reform process, the Nigerian economy, especially the manufacturing sector is still confronted by serious challenges,” he said.

He said the current government policies targeted  at the  real sector were also inadequate and prevented the manufacturing industry  from flourishing.

On the way forward, Ajayi stressed the need for the organised private sector to support government’s  efforts aimed at revitalising  the sector through the much canvassed public private partnership, PPP.