Manufacturing Sector Suffering Negative Growth, Organised Private Sector Warns FG, Labour Against Strike

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By Ayo Yusuf

As the latest economic review by the Manufacturers Association of Nigeria, MAN, shows negative growth in all key performance indicators in the manufacturing sector, the organised private sector has warned that any strike by Nigerian workers now will only ruin the economy.

The Nigerian Labour Congress, NLC, and the Trade Union Congress, TUC, declared Tuesday they would call workers out on strike from Oct. 3.

The declaration followed the expiration of a 21-day ultimatum earlier given to the government to provide palliatives to ameliorate the effects of fuel subsidy removal on Nigerians.

However, the organised private sector has cautioned against such a strike, urging both the federal government and organised Labour to work together to avert what it considers a looming disaster.

The advice comes on the heels of a report that capacity utilisation in the manufacturing sector in the first half of this year declined from 57.9 per cent to 56.5 per cent compared to the corresponding half of 2022.

The report said this reduction of 1.4 percent resulted partly because the economic environment was clouded by election activities resulting in uncertainties in the economy.

It further held that, “This, coupled with the immediate impact of the Naira redesign policy which was announced in October 2022, required that economic agents including manufacturers tread with caution. Manufacturing sector output value increased to N4.1 trillion in the first half of 2023 from N3.99 trillion recorded in the corresponding half of 2022.

“However, the 2.8 per cent increase in the monetary value (not real output) of manufacturing sector production over the period of one year when inflation is at 24.08 per cent at the same period indicates a struggling sector.

“The manufacturing sector faced a myriad of challenges in the first half of 2023. The residual effect of naira redesign and the removal of fuel subsidy towards the end of the period under review triggered inflationary pressure, transportation and production costs as well as other macroeconomics imbalances, thereby worsening purchasing power of households.”

Reacting to the news that a national strike will commence in a week, the Organised Private Sector of Nigeria (OPSN) therefore urged the Federal Government and labour to consider the implications of such a strike on the well-being of more than 200 million Nigerians.

It urged them to work together in the interest of the nation’s economy which could be terribly jeopardised by the strike.

Mr. Segun Ajayi-Kadir, Director-General, Manufacturers Association of Nigeria (MAN), reiterated OPSN’s earlier admonition to avert the looming disruption of socioeconomic activities in the country especially since current economic indicators in the country do not support a strike.

According to Ajayi-Kadir, “The view of the OPSN is that of deep concern; if not that of anxiety.

“We have keenly watched the back-and-forth consultations between the government on the one hand and Labour on the other.

“It is evident that the series of consultations have not yielded positive results and the latter has resolved, in one way or the other, to go ahead with the strike.

“We are worried that adequate consideration is not given to the dire situation of the economy and the devastating and disruptive impact that a nationwide strike will have on the country at this time.

“Government and labour need to understand that our economy is being de-marketed and the livelihood of the average Nigerian is being diminished by these incessant bickerings.

“One is beginning to wonder if the well-being of more than 200 million Nigerians is being factored into their negotiations.”

The MAN director-general urged the government to reengage labour and find an amicable ground to avert the imminent disruption to business activities because of the protest and nationwide strike.

He appealed that adequate consideration be given to the grim state of the economy and the possible unintended consequences of social unrest that might result from the strike.

He also advised manufacturers to be circumspect in their business operations as the association continued to intervene in last-minute attempts to avert the strike.

OPSN is the umbrella body of MAN, the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture and the Nigeria Employers Consultative Association.

Other members are the Nigerian Association of Small and Medium Enterprises and the Nigerian Association of Small-Scale Industrialists.

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