Manufacturers who form the major players in the Nigerian economy have raised concerns about the state of things in the economy. Considering the steady rise in energy costs, scarcity of foreign exchange and a host of others, these players have to give up a limb and an arm to keep things running. While these concerns champion the fear of manufacturers and threaten their overall productivity, there is also the issue of insecurity. Insecurity in Nigeria no longer plagues a particular region but is now a common factor that brings all Nigerians across various parts together.
The centre for the promotion of private enterprise, in a statement by their CEO, disclosed how much of a concern this had become for manufacturers in the state. Foreign exchange is now listed among scarce commodities in the state and has its rates skyrocketing by the day.
Over the past weeks, we have recorded an increase in the cost of diesel by over 300%, aviation fuel has risen by almost the same percentage and gas has not been spared as well as its increase is well over 100%. Businesses are unable to sustain production both in small scale and large scale, profit margin is almost a thing of the past and with the rising costs, the few business left face the fear of sustainability.
For the few businesses who are able to keep their head above water and manoeuvre through limited resources and access to foreign exchange, the effects are still glaring, staring us right in the face. Prices of commodities and even services will continue to skyrocket following the high cost of production. This will eventually lead to a downturn in sales and very poor turnover due to the increase in price and decrease in demand. The profit margin of these manufacturers also stands at a risk point because not every incurred cost can be passed over to the consumers.
The rising degree of a business’ exposure to import will also drastically increase the effect of these things.The rising cost is the one consistent thing about the economy and the constantly collapsing grid lends its hand in contributing to the fear of these major players.The first six months have seemed like turbulent storms for manufacturers in the Nigerian economy and with profit margin gradually being eroded, we can only keep our fingers crossed.
