The Lagos Chamber of Commerce and Industry has said demands by multiple regulatory agencies and high production costs are kicking manufacturers out of business.
In a statement signed by its Director-General, Dr Chinyere Almona, the chamber noted that over the last few decades, the challenges of production in the economy had grown progressively, largely because of the quality of infrastructure, which is why the risk of industrial investment is high and continues to increase.
The statement said poor power supply remained a major burden on businesses and had been one area in which the trend since independence had suffered decline.
It added that the security situation in the country deteriorated in 2021, reaching very worrisome and frightening dimensions.
The statement said, “Over the last few decades, the challenges of production in the economy have grown progressively, largely because of the quality of infrastructure, which is why the risk of industrial investment is high and continues to increase.
“The various policy interventions have not had the desired impact on the sector. Unless there is effective and sustained protection and support for the sector, and a dramatic improvement in infrastructure, the outlook for the sector will remain gloomy, particularly for the small-scale industries. Most SMEs are constrained due to the rising cost of production.”
According to the statement, the Federal Government needs to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free up more money from subsidy payments.
The LCCI also urged the Federal Government to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing, and take a decisive step towards removing fuel subsidies.
It said unless there is effective and sustained protection and support for the sector, and a dramatic improvement in infrastructure, the outlook for the sector will remain gloomy, particularly for the small-scale industries.
The statement said, “It is impossible to have a vibrant manufacturing sector in the face of cheap imports into the country and high production and operating cost in the domestic economy. Some of these imports are landing at 50 per cent of the cost of products produced locally.
“Besides, manufacturers have to worry about high energy costs; they have to worry about high-interest rates – 25 per cent and above; they have to worry about a multitude of regulatory agencies making different demands on them; they have to worry about massive smuggling and under-invoicing of imports, they worry about trade facilitation issues at the seaports and many more. For most manufacturing SMEs, it is a nightmare. Yet production is critical to enduring economic and social stability.”