The Manufacturers Association of Nigeria (MAN) disclosed that the reduced inflation rate of April is still far from the healthy inflation rate needed to kickstart the economy.
This was disclosed by MAN DG, Mr Segun Ajayi-Kadir, in an interview with NAN on Wednesday in Lagos.
What MAN is saying about the April inflation rate
“Efforts also need to be doubled to initiate policy measures that will address rising incidence of insecurity required for seamless farming, food production and ensure monetary flows are directed toward productive activities.
Unfortunately, the Nigerian economy is still struggling to recover fully from the repeated bout with recession and can therefore not afford high inflation rate, which is not a recovery recipe.
In addition, the manufacturing sector is still battling for survival as its growth rate is still neck-deep in the negative region with a growth rate of -1.51% in the Q4 2020 from -1.52 % in Q3 of the same year.
The current inflationary condition in Nigeria adversely affects the profitability of manufacturing and is partly responsible for its poor competitiveness in the sector.
Of course, inflation rate of 18.12% is still not healthy for the well-being of the people and the growth aspiration of the economy and should therefore be properly managed before it spirals out of control,” Ajayi-Kadir said.
MAN urged the FG through the CBN and Finance Ministry to work on more policies that affect the real sector to prevent a clash in policy implementation.
“For instance, while CBN was creating funding windows at single digit interest rate to encourage production, government increased VAT from 5 per cent to 7.5 per cent. Similarly, government increased minimum wage and also allowed increase in electricity tariff and so on.
Government, in partnership with the manufacturers, should select strategic products, particularly those with high inter-industry linkage, for backward integration support and upscale the drive for the resource-based industrialisation agenda,” he said.
The MAN boss called for more forex priority to manufacturers, to enable imports that cannot be sourced locally.
What you should know
Nairametrics reported that Nigeria’s inflation rate stood at 18.12% in April 2021, indicating the first decline in headline inflation in about 20 months.
The urban inflation rate also declined from 18.76% recorded in March 2021 to 16.68%, while the rural inflation rate stood at 17.57%. A reduction compared 17.6% recorded in the previous month.
Food inflation recorded a drop in the month of April 2021, from 22.95% recorded in March 2021 to 22.72%.