President of MAN, Meshioye urges MPC To Evaluate Effects Of Monetary Policy Actions On Manufacturing Sector, Broader Economy

President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye said that the manufacturing sector plays a pivotal role in the economic growth and development of our nation, noting that the Monetary Policy Committee of the Central Bank of Nigeria met few days ago and made certain critical decisions which have far-reaching implications on the manufacturing sector.

Meshioye made this remark during the official presentation of the MAN CEO’s Confidence Index (MCCI) Report on Thursday 23rd May, 2024 at MAN House, Ikeja, Lagos.

He highlighted that this report, since its inception in 2019, has marked a significant milestone in the journey of the manufacturing industry in Nigeria and thanked the media and other stakeholders for their partnership and support over the years in ensuring the growth of the sector.

President MAN said “As you all are aware that the Monetary Policy Committee of the Central Bank of Nigeria met few days ago and made certain critical decisions which have far-reaching implications on the manufacturing sector. The Nigerian economy has encountered significant challenges in recent years, including foreign exchange volatility, escalating energy costs, and food insecurity. These challenges have intensified inflationary pressures, adversely impacting consumers’ purchasing power and impeding the growth of the manufacturing sector. Consequently, production levels have declined, leading to reduced competitiveness within the industry.

“As the umbrella body for manufacturers in Nigeria, the Association acknowledges the efforts of the Monetary Policy Committee (MPC) in confronting the economic challenges facing the country, notably the fluctuations in inflation and exchange rates. While MAN understands the reason behind the MPC’s decision, it is crucial for the committee to thoroughly assess the potential impact on the real sector and the multiplier effect on the nation.”

According to him, collaborating with fiscal authorities is essential to reinforce the sector’s traditional role in driving significant employment, heightened productivity, steady forex earnings, and sustained economic progress.

He lamented that the strategy of raising the Monetary Policy Rate (MPR) has persisted for nearly two years without yielding positive results, adding that he hoped that  the Central Bank of Nigeria (CBN) would explore alternative measures, particularly in addressing the underlying causes of inflation, primarily cost-push factors.

MAN, he said, earnestly urges the MPC to carefully evaluate the effects of these monetary policy actions on both the manufacturing sector and the broader economy. He maintained that achieving a delicate equilibrium between addressing macroeconomic challenges and fostering the growth and resilience of the manufacturing industry is crucial.

Meshioye said that MAN, therefore advocates for robust collaboration between monetary and fiscal authorities and suggests considering the following policy measures: “Implement targeted interventions aimed at mitigating the underlying cost-push factors driving inflation, thereby alleviating the financial burden on manufacturers.

“Prioritise forex and credit allocation to the manufacturers and fast track the proposed recapitalization of the banking sector.

“Emphasize the development of infrastructure within industrial hubs and bolster nationwide investments in renewable energy sources to alleviate logistical expenses and enhance competitiveness.

“Further reduce the reliance of the country on imported products and raw materials by providing incentives for investment in backward integration and local sourcing to reduce the pressure on the dollar to the barest minimum,” he emphasized.