As Nigeria exits recession, MAN says prices will only drop if…

Following the announcement that the country has exited its worst recession, the Manufacturers Association of Nigeria (MAN) believes Nigerians should not expect an automatic impact in the prices of goods and services if certain key issues are not duly addressed by the Federal Government.

The National Bureau of Statistics (NBS) on Tuesday, stated that Nigeria has exited its worst economic recession in more than two decades, notching up growth of 0.55 per cent in the second quarter of 2017,

Addressing newsmen at a briefing in Lagos on the 45th Annual general meeting scheduled to hold on 13 and 14 September, 2017. President, of the association, Dr. Frank Jacobs said that, though the announcement by NBS might be true, what matters is the impact being felt by all classes of citizens.

“It may be true to say that the economic growth rate of 0.55% is good. The question remains; is the growth real, is it sustainable and can it engender inclusiveness?, the impact of a positive improvement like this should ideally be felt by all classes of citizens in our country before one can boldly assert that a growth experience is inclusive”.

“MAN believes that, with appropriate mix of policies and concerted efforts of all stakeholders, the growth rate would eventually become inclusive and impact the lives of over 180 million Nigerians”.

Read also: Nigeria’s economy out of recession –NBS

Jacobs, while responding to questions, stated that, even with the contribution of the manufacturing sector to the GDP growth rate, exiting recession does not mean that prices will come down automatically except when concerted efforts are made to address the challenges faced by Manufacturers in the country.

“I don’t believe that recovery from recession means that prices will come down, why prices are high is because of a fall in the value of naira to the dollar and as long as it persists, prices won’t come down. Although with improved productivity in agriculture sector, prices might come down due to competition but not as significantly as expected”.

“As long as we depend on imported raw materials and machinery for manufactured goods, and buy dollar at the current exorbitant rate, it will be almost impossible for prices of manufactured goods to be lower than they are today, maybe competition and interplay of the supply and demand, I don’t expect prices to change significantly”.

Jacobs believes that there is very little the Government can do on a short term basis to make Nigerians feel the impact of the exit from recession.

“I’m not sure there is anything the government can do for Nigerians to feel the impact unless there is subsidy in the cost of goods, which looks impossible. But if the operating environment is improved upon, maybe the cost of production will come down and it will affect the prices of goods. If government can work with CBN to lower the current double digit interest rate, Create enabling environment, Have the right infrastructure in place, Reduce cost of funding. Once these are done, it might reduce the price of commodities.”.

“If a manufacturer can source funding at 5% today, the prices of products will come down. If there is no multiple taxation manufacturer are subjected to, good roads”, he added.

The association’s annual general meeting is expected to address topical issues on the Recovery and Growth of the Nigerian Economy and expected stakeholders are the Governor of the Central Bank, Godwin Emefiele and Comptroller General of the Nigeria Customs Service, Col Hameed Ali (Rtd).

 

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