In the face of expectations by investors in the manufacturing sector of the Nigerian capital market to experience reversal of top challenges confronting the sector, experts have pointed out that the challenges may take longer to abate.
NOIPolls & the Center for the Study of Economies of Africa (CSEA) Manufacturing Sector Survey Report for the just ended 2016 financial year showed that energy, policy inconsistency and other factors acted as cogs in the wheel of Nigeria’s Manufacturing Industry
The report noted deterioration in petrol and diesel by 80 per cent, power supply by 73 per cent, policy inconsistency by 55 per cent, limited access to credit 49 per cent and low patronage 41 per cent.
Frontier Markets Analyst, Chibuike Oguh, in “Nigeria needs to strengthen industrial and consumer sectors,” pointed out that “For Nigeria to achieve long-term economic growth, the country’s faltering industrial and consumer sectors must be strengthened.”
He pointed that the industrial and consumer sectors have been two of the hardest hit sectors in Nigeria’s current economic downturn caused by the slump in global oil prices. “The decision of the Central Bank of Nigeria to impose stiff foreign exchange controls amidst low oil receipts, and the long period of standstill on the 2016 budget, have been particularly damaging to these sectors,” Oguh said.
Some companies listed under the Industrial goods sector of the Nigerian Stock Exchange (NSE) due for delisting include, African Paints, Ashaka Cem, Berger Paints, CAP and Cement Co. of Northern Nigeria. Others are First Aluminum Nigeria, Lafarge Africa, Meyer, Paints and coatings manufacturers and Portland Paints & Products Nigeria, amongst others.
As at close of trade on Tuesday January 03rd 2017, total capitalization of the NSE manufacturing sector stood at N3,227,310,385,859.03. It is expected that where stringent effort is not put in place through policy formulation and positive market sentiment, the capitalization could further shrink, reflecting losses by the companies and their large pool of investors.