As President Bola Ahmed Tinubu’s administration marks one year in office today, manufacturers and labor unions across Nigeria are calling on the federal government to urgently address the instability in the forex market and rising inflation, which are severely impacting both citizens and businesses.
In interviews with LEADERSHIP, industry stakeholders highlighted numerous issues such as policy inconsistencies affecting foreign exchange, diminishing working capital for businesses, unreliable power supply, and widespread insecurity—all contributing to job losses over the past year. They emphasized the need for the government to resolve these challenges to achieve economic growth.
Manufacturers’ Perspective
Segun Ajayi-Kadir, Director-General of the Manufacturing Association of Nigeria (MAN), described the past year under Tinubu’s administration as marked by uncertainty, deterring both potential and existing investors. Ajayi-Kadir stressed the importance of prioritizing the manufacturing sector, which he sees as crucial for sustainable economic growth and foreign exchange inflow. He urged the government to implement sector-specific recommendations, provide necessary policy support, and offer incentives to revitalize the sector.
Ajayi-Kadir also called for a comprehensive overhaul of the power sector, investment in renewable energy, and a focus on patronizing made-in-Nigeria products. He advocated for local sourcing of raw materials, boosting energy security through the Electricity Act 2023, maintaining liquidity in the forex market, and managing the floating exchange rate system within acceptable bounds.
Labor Unions’ Concerns
Comrade Garba Ibrahim, President of the National Union of Food, Beverages, and Tobacco Employees (NUFBTE), criticized policies leading to multiple taxation, high electricity tariffs, and the removal of fuel subsidies, which have driven many businesses to relocate to neighboring countries. Ibrahim highlighted how these challenges have turned Nigeria into a dumping ground for foreign products and exacerbated the high cost of doing business.
Comrade Gbenga Komolafe, General Secretary of the Federation of Informal Workers of Nigeria (FIWON), noted the adverse effects of fuel subsidy removal and exchange rate liberalization on inflation, significantly increasing prices of basic goods and services. This has resulted in decreased consumer purchasing power and a sharp decline in real incomes.
Economic Analysis
The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the resilience of the manufacturing sector amidst recent reforms. However, Director-General Dr. Chinyere Alumona emphasized the need for a systematic review of policies to achieve desired outcomes. She pointed out that despite some bold policy decisions, such as removing fuel subsidies and harmonizing exchange rates, the expected positive effects have yet to materialize.
Alumona highlighted several challenges over the past year, including high inflation, a weakening naira, supply chain disruptions due to insecurity, and a weak production base. She called for fixing the forex crises, adopting lower exchange rates for import duties on raw materials, offering manufacturers concessionary interest rates, and ensuring a stable and predictable policy environment.
Conclusion
As President Tinubu’s administration completes its first year, stakeholders in Nigeria’s manufacturing and labor sectors are urging the government to address critical economic issues. By tackling forex instability, inflation, and other structural deficiencies, the administration can help stabilize the economy, support businesses, and improve the overall well-being of Nigerians.
Leave a Reply