Manufacturers lament ever increasing cost of diesel, challenge government

The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to provide an integrated support system to reduce the impact of increasing cost of diesel on manufacturing.

Director-General, MAN, Mr Segun Ajayi-Kadir, made the call in a statement issued in Lagos on Saturday.

The News Agency of Nigeria (NAN) reports that MAN represents the interests of more than 3,000 manufacturers spread across 10 sectors, 76 sub-sectors and 16 industrial zones.

The manufacturing sector, which dominates export trade in the West African sub-region, employs more than five million workers, directly and indirectly and contributes 8.46 per cent to the nation’s GDP.

Ajayi-Kadir stated that the call was pertinent during times of crisis to enhance the performance of the sector through a pro-manufacturing policy that would encourage scale-up and lower unit cost of production.

He added that the manufacturing sector had been battered by many familiar challenges that had plummeted the number of industries and converted industrial hubs to warehouses of imported goods and event centres.

The MAN president also stated that top on the list of challenges confronting the sector was high operating cost caused by the twin problem of inadequate electricity supply and the high cost of alternative energy sources.

He added that the more than 200 per cent increase in the price of diesel had become a major constraint with spiral effects.

“MAN is greatly concerned about the implications of the over 200 per cent increase in the price of diesel on the Nigerian economy and the manufacturing sector in particular.

“More worrisome is the deafening silence from the public sector as regards the plight of manufacturers,’’ he stated.

Ajayi-Kadir urged government to strengthen the nation’s economic absorbers from external shocks to reduce the myriad challenges the manufacturing sector was already beguiled with.

He stated that by the time the current domestic reserve of manufacturing inputs was exhausted, prices of manufactured products would soar in the face of acute shortfall in supply.

Ajayi-Kadir added that government should continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession.

This, he explained, would avert a complete shutdown of factories nationwide.

He urged government to issue licenses to manufacturing concerns and operators in the aviation industry to import diesel and aviation fuel directly to avert the avoidable monumental paralysis of manufacturing.

Ajayi-Kadir also called for the removal of VAT on diesel as instant stimulus for immediate reduction in price and expedite action in reactivating or privatising petroleum products refineries in the country.

“As a matter of urgency, government should address the challenge of repeated collapses of the national grid which is causing acute electricity shortage, especially for manufacturers,’’ he stressed. (NAN)