2024 Forecast: MAN Highlights Trends That Will Shape the Manufacturing Sector
By Azeez Disu
The outlook for the manufacturing sector in 2024 in Nigeria may not be a positive one, at least in the first half of the year according to the Manufacturers Association of Nigeria’s (MAN) Manufacturing Outlook for the year 2024.
MAN noted that 2024 may start on a tough note for manufacturing but may end with some measured improvements because the envisaged policy reforms, improved commitment to domestic production and the general positive outlook seems favourable for the sector.
“It is obvious that the outlook for the manufacturing sector in 2024 may not be a positive one, at least in the first half of the year. The period will be challenging, with a subtle possibility of recovery from the third quarter. The envisaged recovery is highly dependent on the deployment of policy stimulus supported by a synthesis of domestic growth-driven, export-focused, and offensive trade strategies. This will promote resilience, and steady growth and ensure that the sector gains meaningful traction in the later part of the year, ” it stated.
It added that “In 2024, sectoral real growth is expected to hit about 3.2 percent; contribution to the economy will most likely exceed 10 percent and the Manufacturers’ CEOs Confidence Index is predicted to rise above 55 points thresholds by the end of Q4 2023.”
Also, “Average capacity utilization will still hover around the 50 percent threshold as the forex-related challenges and high inflation rate limiting manufacturing performance may linger until mid-year.”
It is optimistic that the sector may experience a meagre improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter.
MAN urged the government to expend cost savings from fuel subsidy to deploy a bouquet of production-focused policies, Overhaul the power sector, give priority to the patronage of made-in-Nigeria products in all its purchases, and encourage local sourcing of raw materials among others.
“Maintain all measures to boost the level of liquidity and degree of transparency in the official forex window even as the backlog of $7 billion forex obligations is being cleared.”