The Manufacturers Association of Nigeria (MAN) has said that the manufacturing sector has been at the receiving end of Nigeria’s debt crisis which has seen the nation’s debt profile rise by 410 percent over the last 8 years.
They also warned that the N77 trillion inherited by the administration of President Bola Tinubu is bound to limit the achievements of the government if urgent critical steps are not taken.
The MAN made this assertion in its Manufacturers CEO Confidence Index (MCCI) for Q1 2023 that was titled, “Special Focus: MAN at the Receiving End of National Debt Crisis.”
The report stated, “The domino effects of escalating public debt on the manufacturing sector are endless.
“To start with, rising domestic debt is highly crowding out private investment in the manufacturing sector by reducing credit availability and forcing hike in lending rates.
“External debts are mostly serviced in foreign currencies, hence high demand for foreign currencies further depreciates the naira and makes importation of non-locally produced critical inputs highly expensive for manufacturers.
“Moreover, higher debt servicing is consuming greater volume of forex and worsening the forex scarcity that has plagued the manufacturing sector for many years. Higher debt repayment requires increased revenue.
“The Nigerian government has continued to breed a harsh business environment by its indiscriminate imposition of high and multiple taxes on manufacturers all in a bid to generate revenue.
“Huge public debt led to low foreign investment and foreign capital inflow which worsen the forex scarcity that has remained a bone in the throat of manufactures.”