Manufacturers’ CEOs confidence in economy rises

The confidence of Chief Executive Officers (CEOs) of Manufacturers Association of Nigeria (MAN) on the economy showed moderate improvement, rising to 50.7 points in Q4 2024.

MAN CEO Confidence Index (MCCI) report released yesterday said despite the prevailing macroeconomic and operational challenges manufacturing companies in Nigeria faced, the CEOs remained resilient.

According to the report, the CEOs’ resilience was revealed by the tepid rise of 0.5 point in the MCCI from 50.2 points in Q3 2024 to 50.7 points in Q4 2024

MAN Director-General, Mr. Segun Ajayi-Kadir said the moderate improvement in the Aggregate MCCI was the first since Q1 2024.

MAN created the MCCI as a gauge for assessing quarterly shifts in manufacturing activities, influenced by macroeconomic trends and government policies.MCCI is, therefore, the barometer used by MAN to garner the perceptions of CEOs of manufacturing companies on the impact of changes in the economy on manufacturing operations.

Ajayi-Kadir said a breakdown of the diffusion indices for Q4 2024 revealed that all current indices recorded improvement due to seasonal demand and relative stability in the exchange rate during the period.

He, however, said they remained below the 50-point benchmark. “The report also confirmed a downward review of manufacturers’ expectation for the first quarter of 2025 due to the prolonged harsh macroeconomic environment and the predicted slowdown of business activity in the first month of 2025,” he said.

Nevertheless, the projected indices, according to Ajayi-Kadir, remained above the 50-point threshold due to the expectations of a more stable exchange rate, halt in interest rate hikes, minimal decline in energy prices and the enactment of favourable Tax Reform Bills by Q1 2025.The MAN DG noted that sectoral breakdown of the report revealed that the confidence indices of three Sectoral Groups contracted while seven Sectoral Groups witnessed improvement in confidence levels. However, two of the seven Sectoral Groups dipped below the 50-point threshold.

The zonal breakdown also showed that five Industrial Zones recorded confidence indices below 50 points, while nine performed above the threshold. However, four of the nine Industrial Zones recorded contracted indices.

Ajayi-Kadir said against the backlashes of the macroeconomic environment in 2024, “this report ends on a moderate expectation for 2025. In specific terms, the manufacturers’ outlook for 2025 stands at the crossroads of optimism and reality checks.”

The MAN boss, while pointing out that 2025 is a pivotal year and the outcome will be crucial for this most significant sector, however, said exorbitant electricity tariff hike, high exchange rate, multiple taxation, high interest rate, low credit access and insecurity remain some of the top challenges of manufacturers.

“The challenges are clear. Macroeconomic reforms must involve actionable plans that take precedence over rhetoric,” he stated.

He insisted that the President’s ambitious goal of taming inflation down to 15 per cent and stabilizing the naira at N1, 500/$ must be pursued by clearly defined and easily assessable actions, with appropriate timelines.

Ajayi-Kadir this year is a critical period where government must lead by example by intentionally ramping up domestic industrial production and patronizing Made-in-Nigeria to further reduce the forex demand pressure.

To boost Nigerian’s trust in locally made products, he said government Ministries, Departments and Agencies (MDAs) must demonstrate by leading the charge and making Nigerian products their first choice.

Ajayi-Kadir expressed confidence that the restoration of macroeconomic stability can become a reality. He, however, stated that this will depend on a number of factors, including a more stable exchange rate, reliable energy supply, and relaxation of monetary policy stance.Other factors, according to him, include complete disbursement of intervention funds, further improvement in the fight against insecurity and the effective implementation of the Tax Reform Bills as well as the National Single Window Project.

Manufacturers’ CEOs confidence in economy rises - The Nation Newspaper