According to the Manufacturers Association of Nigeria (MAN), the January 2021 inflation rate of 16.47 percent is a threat to the recovery and growth expected in the manufacturing and industrial sectors.
The NBS disclosed that food inflation rose to 20.57% in January 2021 from 19.56% in December 2020. It attributed the development to increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, Vegetable, Fish and Oils and Fats.
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Reacting, the MAN Director-General, Segun Ajayi-Kadir said that the increase in food inflation rate would worsen the already high cost of living and the disposable income of the average Nigerian.
Ajayi-Kadir noted that the resulting weak consumer spending would worsen the the high stock of unplanned inventory that the manufacturing sector was already confronted with.
“The manufacturing sector has been struggling, particularly in the past four quarters, from the combined effect of COVID-19, deteriorating infrastructure, high regulatory compliance cost and tax obligations.
“So, rising and high inflation, perennially high interest rates and scarce/high rate of forex has compounded the downturn in the sector in terms of the envisaged recovery.
“The concerted efforts of government to recover the economy will have to address the aforementioned challenges,” he said.
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He advised the Nigerian Government to intensify efforts at stabilising the consumer price level through growth in agricultural output and diversification of the Nigerian economy in order to guarantee stable prices in both agricultural and manufactured goods.
Ajayi-Kadir also pushed for the resuscitation of moribund industries in the country to boost output, thereby reducing prices.
“Government should also partner with the Manufacturers Association of Nigeria to accelerate the success in the resource based industrialisation initiative of the Association.
“Government should assist manufacturing productivity with credit at competitive price.
“This could be in the form of concessions and enhancing existing special credit windows or creating additional ones for this important sector of Nigerian economy,” he said.
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