Manufacturing Sector To Suffer Weakened Consumer Demand — LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has predicted that the manufacturing sector is expected to suffer from weakened consumer demand, high energy costs, policy uncertainty and a harsh regulatory environment unless the government takes targeted financing support to critical productive infrastructure in the country. 

Dr Chinyere Almona, the Director General of LCCI, made the forecast in the chamber’s statement on the economy 2023, where she hinted that the manufacturing sector suffered from headwinds, such as scarcity of forex for import of inputs, weakened consumer demand due to weak purchasing power, high energy cost, among others.

According to the LCCI, with these factors persisting into 2023, the sector may likely record a growth away from the negative growth of -1.9 per cent as of Q3 of 2022. 

She explained that with the lowering of imports due to forex scarcity, local manufacturing could rev up in growth to meet the growing unmet local demand for hitherto imported finished products. 

This, she said, can come to reality, if the issues of rising inflation, high energy cost, high-interest rates and logistics challenges due to insecurity in most parts of the country are addressed. 

Almona further affirmed the need for the federal government to sustain its targeted interventions in selected critical sectors like;  agriculture, manufacturing, tackling insecurity and freeing more money from subsidy payments. 

“With some of these challenges resolved, we expect to see a higher growth rate at above three per cent higher than the less than average two per cent recorded in 2022.

"We reiterate our call earlier made that government at all levels should invest more in the prevention of climate change-induced natural disasters like flooding.

“It is very imperative that we need sound monitoring and evaluation over the budget allocations to capital projects and defence spendings to respectively tackle the infrastructural deficit and the fight against insurgency,” she said.