By Rukayat Moisemhe
Lagos, Feb. 21, 2019 Manufacturers Association of Nigeria (MAN) on Thursday called on Federal Government to synchronise its monetary and fiscal policies in order to achieve the country’s economic growth projection for 2019.
He said that the performance of the economy in 2018 was positive though fragile due to its slow but steady growth rate.
This, he said, stemmed from the fact that the national output growth soared from 1.95 per cent in the first quarter to 2.38 per cent in the fourth quarter of the year.
In addition, external reserve improved, inflation headed southward, exchange rate was relatively stable, the supply of foreign exchange and the power supply to the sector improved marginally.
“All of these positive factors were credited to the various economic policy initiatives and reforms introduced by the government.
“The performance of the manufacturing sector in the course of 2018 was positive but its oscillatory growth pattern, however, remained a source of concern for stakeholders.
“For instance, in the first quarter of 2018, the growth rate stood at 3.39 per cent, fell to 0.68 per cent and 1.92 per cent in the second and third quarters and later increased to 2.35 per cent in the fourth quarter of the year.
“Capacity utilization increased marginally from 57.1 per cent in 2017 to 57.75 per cent while the aggregate local sourcing of raw materials by the sector also dropped to about 60.29 per cent in 2018 from 63.21per cent recorded in 2017,” he said.
However, Osidipe explained that the association attributed the wobbling performance of the sector to high cost of doing business, the prevailing infrastructure deficit, sluggishness in manufacturing activities due to the heaps of unsold inventory to mention but a few.
“Whenever the manufacturing sector experiences any form of growth, it generates trickle-down impacts on numerous macroeconomics variables.
“The current positive but wobbling growth pattern will positively impact utilization of local raw materials, productivity, employment, contribution to GDP, export earnings, growth of ancillary businesses and distributive segment of the economy as well as government tax revenue.
“Though, the overall growth of the economy still fell short of the country’s growth target of 3.5 per cent as stated in 2018 budget.
“And the projections of international organisations for the country, increased level of seasonal activities in the last quarter of the year across all sectors ensured that the country’s economy finished on a high.
“Chiefly among the factors that ensured a bigger positive growth in the last quarter is the non-oil sector which was aided by the inflation targeting policy of the Central Bank of Nigeria that ensured a relative increase in the purchasing power of the final consumer.’’
Osidipe added: “Though cost of doing business in Nigeria is still high, some achievements have been recorded in the ease of doing business in the country which has further given room for increased economic activities.
“However, it is not yet ‘Uhuru’ for the economy, particularly the non-oil sector, as perennial issues inhibiting the performance of business concerns are still very much present.
“Thus, for the country to achieve and surpass the growth projection for 2019, there is the need to ensure monetary and fiscal policy sync that would ensure sustainability of the recorded economic growth, harmonise taxes to avoid overburdening business concerns.
“In addition, sustain the backward integration policy to sustain FX stability and the need to deregulate the downstream sector to improve efficiency in the petroleum sector which has been the main pressure point for the nation’s forex.”
Edited by Edwin Nwachukwu