About 60% manufacturers stopped production in northeast over insecurity-MAN DG

THE Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, said about 56-60 per cent of its registered manufacturers in the Northeast have ceased production due to escalating insecurity in the region. 

Ajayi-Kadir emphasized that continued insecurity could further cripple the regional economy and lead to significant job losses.

In an interview with Channels Television, published on Saturday, May 18, he also highlighted multiple taxation, and high energy costs as part of the major challenges manufacturers face in Nigeria. 

The Director-General emphasized the urgent need for improved security measures to restore confidence and enable the resumption of manufacturing activities, urging the government to come up with policies that will help improve the performance of the manufacturing sector. 

“Insecurity is a major challenge, I can tell you that we lost between 56 to 60 percent of our members in the North-East to insecurity, they just stopped production. You now look at the cost that you need to incur to be secured, this was something that many years ago was non-existent,” he said.

He also noted that despite some of the manufacturers paying more for security, persistent threats of violence and instability have severely disrupted operations, forcing many businesses to shut down. 

“We had local communities supporting industries because they are positively impacted but now, there are infiltrations even from outside of the immediate community, and the frustration that the people within the community feel has made them turn the other way and so it increases our cost. I can tell you that some of us pay for security more than the taxes we pay because it (security expense) has to be continuously.

“Insecurity is a very serious challenge that we face. Insecurity is a disincentive to manufacturing just like any other business and so the government needs to step up activities,” he added.

Ajayi-Kadir further noted that when President Bola Tinubu announced his support for domestic production, there was hope that he would address these business constraints, but said the industry is now looking for concrete actions from his administration to match his words. 

According to him, for the manufacturing sector to thrive, policies need to align with the President’s promises, ensuring that manufacturing costs do not continue to rise and that fiscal and monetary policies do not clash.

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He further said that the manufacturing sector calls for a consistent policy approach to avoid unexpected obstacles that could negate advancements.

“Incidentally, President Bola Tinubu, in the first one month of assuming office, made it clear that he was going to promote domestic production.

“The manufacturing sector in Nigeria has continued to underperform not because we do not have entrepreneurs that have gone into manufacturing to be able to produce and advance the performance of the sector, but because of the binding constraints that the environment has continued to throw. 

“So, we assumed that when the President made this pronouncement, he was committed to removing those binding constraints, ” he added.

This wasn’t the first time a manufacturer would be decrying the persistent insecurity and its impact on their multimillionaire investment.

The ICIR, on May 9, reported how a multi-billion naira investment, Okomu Oil Palm Plc raised concerns over the threat to its investment in Edo State by militants who disrupt its operations and attack its workers. 

The company said it would shut down if the attacks persisted.

It said this following the latest attack and killing of three of its workers inside the plantation on Monday, May 6.

While lamenting the worsening security situation in the area, he noted that if the situation was left unchecked, the company’s multi-billion naira investment could halt its operations.

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He urged  the government to take control of the area currently being terrorised by militants.




     

     

    Similarly, in 2022, The ICIR reported how giant industries silently disappeared from the country due to the foreign exchange crunch and market inflation.

    During this period, investors who had planned to set up local manufacturing plants also retreated.

    In 2023, a major pharmaceutical firm, GlaxoSmithKline(GSK), producer of prescribable medicine such as Augmentin and Amoxil, disclosed its strategic plan to stop the commercialisation of its prescription medicine and vaccines in Nigeria and transition to a third-party distribution model for its pharmaceutical products, citing foreign exchange concerns.

    The company was one of the firms that left the nation that year.

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    Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: [email protected]. He tweets @UsmanMustapha_M

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