Industry
Manufacturing Sector Sheds Over 80,000 Jobs
Over N300bn required to reposition sector
By Crusoe Osagie
The Manufacturers Association of Nigeria (MAN) has disclosed that about 84,862 jobs were lost in the manufacturing sector in 2003.
According to a report of the association, the sector created about 1,395,419 jobs in the year 2002 which was reduced to 1,310,557 jobs in 2003 resulting in about 84,862 becoming unemployed who were hitherto employed in the sector.
The MAN report however, attributed the job loss in the sector to the increased entry to the Nigerian market of goods most of which were substandard and cheap.
"Due to the increased influx of cheap/substandard finished products which has reduced the demand for local products with its consequence of a reduced capacity utilisation and high stock of inventory, the share of the manufacturing sector in employment generation continued to fall," the report said.
"Aggregate manufacturing employment by sectors reduced from 1,395,419 in 2002 to 1,310,557 in 2003 thus worsening the level of poverty which the government and all concerned Nigerians are trying to fight," the report added.
The report also stated that during the period, the manufacturing sector also experienced very low level of bank credit for financing activities in the sector.
According to the report, the sector continually experience low level bank financing, which hampered development in the sector.
"The banking sector instead of financing the working capital requirements and expansion plan of the manufacturing sector, has continued to finance fully LPO of importers with little or nothing going to the main real sector of the economy," it said.
The report stated that a survey on the manufacturing sector funding requirement showed that a total of N355.1 billion was required by manufacturers for both working capital and expansion purposes.
"Out of the said N355.1 billion, N135.7 billion was required for working capital while N219.40 billion was for expansion purposes," the report said.
The survey according to the report also gave the preferred rate of interest by manufacturers as 9.83 per cent as against the average existing rate of interest of 29.34 per cent.
"The high interest rate prevailing in the funds market has limited the investment capability of the manufacturing sector, frustrating growth and reducing employment opportunity," the report said.
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