The Manufacturers Association of Nigeria has described the January 2021 inflation rate of 16.47 percent as a threat to the recovery and growth of the manufacturing and industrial sectors.

Segun Ajayi-Kadir, Director General of MAN, stated this on Tuesday.

According to the National Bureau of Statistics, January’s inflation rate climbed to 16.47 percent from 15.75 percent in December 2020, translating to a 0. 71 percent increase.

Mr. Ajayi-Kadir said the increase in food inflation rate at 20.57 percent, from 19.56 percent in December 2020, would compound the already high cost of living and the average Nigerian disposable income.

The NBS, in its report, had said the composite food index rose by 20.57 percent in January compared to 19.56 percent in December.

This rise was caused by a spike in prices of bread and cereals, potatoes, yam, other tubers, meat, fruits, vegetable, fish, oils, and fats.

Mr. Ajayi-Kadir noted that the resulting weak consumer spending would worsen the high stock of unplanned inventory that the manufacturing sector was already confronted with.

“The manufacturing sector has been struggling, particularly in the past four quarters, from the combined effect of COVID-19, deteriorating infrastructure, high regulatory compliance cost, and tax obligations.

“So, rising and high inflation, perennially high-interest rates, and scarce or high rate of forex has compounded the downturn in the sector in terms of the envisaged recovery. The concerted efforts of the government to recover the economy will have to address the aforementioned challenges,” he said.

The MAN boss advised the government to intensify efforts to stabilise the consumer price level through growth in agricultural output and diversification of the Nigerian economy to guarantee stable prices in both agricultural and manufactured goods.

He also pushed for the resuscitation of moribund industries to boost output, thereby reducing prices.

“The government should also partner the Manufacturers Association of Nigeria to accelerate the success in the resource-based industrialisation initiative of the association.

“The government should assist manufacturing productivity with credit at a competitive price. This could be in the form of concessions and enhancing existing special credit windows or creating additional ones for this important sector of the Nigerian economy,” he said.

(NAN)