Sixty-nine per cent of manufacturing companies in Nigeria are of the view that the Nigerian business environment is unsupportive of their operations, a study conducted by the NOI Polls, in collaboration with the Centre for the Study of Economies of Africa, has revealed.
The report for the manufacturing sector, which was unveiled on Tuesday in Abuja, stated that 78 per cent of sampled companies explained that the disparity between the official and parallel market foreign exchange rates was negatively affecting their operations.
In arriving at the figures, the report said a total of 205 manufacturing companies were interviewed in all the geo-political zones.
It said, “Overall, 69 per cent of sampled firms do not find the business environment supportive, including 74 per cent of small companies, 63 per cent of medium companies and 71 per cent of large companies.
“The lack of supportive environment is reported by 100 per cent of companies in North-Central, 88 per cent in South-East, 80 per cent in North-West, 67 per cent in South-South, 65 per cent in North-East and 35 per cent in South-West.”
In terms of capacity utilisation, the report said 45 per cent of manufacturing companies stated that they were working below their installed capacity.
The report listed some of the challenges facing the sector as poor power supply, policy inconsistency, lack of access to credit and market demands.
It said due to the chronic challenges of infrastructure and inputs, the manufacturing sector had yet to transit from a demand-driven regime to a supply-driven regime that is essential for long-term growth.
Commenting on the report, the Chief Executive Officer, NOI Polls Ltd, Dr Bell Ihua, said the report recommended that the government should implement import substitution programme as a way of addressing some of these challenges.
Other recommendations are that a strategic foreign exchange window should be created for the manufacturing sector while efforts should be put in place to reform public finance institutions to improve the sector’s access to credit.
