Manufacturers expressed a lack of confidence in Nigeria’s economic outlook in August 2024, the latest Business Expectations Survey (BES) conducted by the Central Bank of Nigeria (CBN) has shown.
The survey, which involved 1,600 business enterprises, revealed that the manufacturing sector was notably pessimistic, while many other sectors were optimistic about the economy.
According to the report, the sectors, such as manufacturing, construction, mining, and utilities, had mixed sentiments.
Manufacturing and construction both showed negative indices of -5.5 and -10.0 points, respectively, signaling a significant lack of confidence.
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However, sectors such as mining, quarrying, and electricity displayed optimism, with an index of 30.4 points, highlighting the varied sentiments within sectors.
“Business sentiment for the Agriculture and Services Sectors was optimistic in the current month, but the Industry Sector was pessimistic.
“However, all the sectors expressed optimism for the next month. The index of optimism in the Agricultural and Services Sectors were 5.2 and 1.2 points respectively, while that of the Industry Sector stood at -3.9 points.
“For the subsectors, Mining, Quarrying, Electricity, Gas & Water Supply; Non-Market; Market showed optimism at 30.4, 2.7 and 0.7 points, respectively, while Construction and Manufacturing Sectors were pessimistic at -10.0 and -5.5 points, respectively,” the report read.
The BES report identifies insecurity, high interest rates, and multiple taxation as the primary constraints to business activity.
The survey also noted that an unfavorable economic climate and insufficient power supply are contributing to the businesses’ struggles in the country.
These factors have made it difficult for manufacturers to maintain operations at optimal levels, eroding confidence in both current business conditions.
Unlike the pessimistic outlook for August, manufacturers expressed cautious optimism for the upcoming months.
The manufacturing sector is expected to see a slight improvement in confidence for September, with a projected index of 7.7 points. This anticipated improvement signals a potential rebound in business activity as companies look to adjust to the challenging operating environment.
The Director-General of Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, had criticised the multiple and high rates of taxes and levies imposed by the three tiers of government and their agencies.
Ajayi-Kadir noted that the challenges facing the manufacturing sector, particularly due to the current macroeconomic conditions, are exacerbated by the ongoing foreign exchange volatility and high electricity tariffs.
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