By Yinka Kolawole
Manufacturers in Nigeria are expressing a cautious optimism on the nation’s economic outlook in the months ahead at the backdrop of a significant low confidence shown in August.
In its latest Business Expectations Survey (BES), the Central Bank of Nigeria (CBN) reported that the manufacturing sector was notably pessimistic in August, while many other sectors were optimistic about the economy.
The survey, which involved 1,600 business enterprises, however, noted that unlike the pessimistic outlook for August, manufacturers expressed cautious optimism for the upcoming months, starting from September.
“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 report stated.
According to the survey, 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 in August, respectively, signaling a significant lack of confidence.
However, sectors such as mining, quarrying, and electricity displayed optimism, with an index of 30.4 points, highlighting the varied degree of sentiments within the sectors.
“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 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 largely dominant amongst the adverse factors in the business environment.
These factors have made it difficult for manufacturers to maintain operations at optimal levels, eroding confidence in both current and future business conditions.
Also the Manufacturers Association of Nigeria (MAN) had criticised the multiple and high rates of taxes and levies imposed by the three tiers of government and their agencies.
In addition, the Director-General of MAN, Segun Ajayi-Kadir, had 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.
The post ECONOMIC OUTLOOK: Manufacturers expressing cautious optimism — CBN Survey appeared first on Vanguard News.
