ARTICLE | OCTOBER 27, 2011 - 12:12PM | BY KINGSLEY ADENIYI, WITH AGENCY REPORTS
The President of the Manufactures Association of Nigeria (MAN), Chief Kola Jamodu, on Wednesday, said 1.8million jobs have been lost in the manufacturing sector in the last 10 years.
He also said 1,000 manufacturing companies closed down nationwide, while their factories were converted to places of worship and event centres.
Jamodu, who spoke in Lagos at the annual general meeting of the Ikeja branch of the association, said the job loss was due to the acute state of infrastructural decay and general insecurity.
Smuggling and unbridled importation, multiple taxation and weak demand as a result of low purchasing power were the other contributing factors he listed.
According to him, key macro-economic fundamentals indicated that the manufacturing sector witnessed dwindling performance over the years.
Quoting a survey, Jamodu said capacity utilisation of the sector declined from 70.1 percent in 1980 to 45 percent in 2010 while its employment rate declined from 2,752,832 in 2001 to 966,395 in 2010.
“Its contribution to the Gross Domestic Product (GDP) declined from 9.5 per cent in 1975 to 4.41 per cent in 2010,” he said.
He, however, expressed joy that the challenges faced by the manufacturing sector are being addressed through the thrust of the National Transformation Agenda of the current administration.
“This was reflected in the introduction of some industry-friendly policies and palliatives germane to the survival of the manufacturing sector,” he said.
Jamodu said the country’s aim of becoming one of the top 20 economies in 2020 would be a mirage unless a virile manufacturing sector was created and sustained.
The Chairman of the Ikeja branch of MAN, Isaac Agoye, said the enabling environment remained seemingly harsh due to the dearth of infrastructure, policy inconsistencies and inadequate access to long term funding.
“The situation was compounded by banking sector reforms and the leadership succession challenge.
“Though the Federal Government responded with the bailout fund and other palliatives, the manufacturing sector is still far from attaining its full potentials,” he said.