The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has raised concerns that rising insecurity is compelling many manufacturers to cease operations.
In a recent television interview reported by Thisday, Ajayi-Kadir disclosed that manufacturers are spending more on security than on government taxes.
Ajayi-Kadir also cited multiple taxation and high energy costs as significant challenges for manufacturers in Nigeria.
He urged the federal government to mitigate the unintended consequences of its reform policies to improve the competitiveness of the manufacturing sector.
“Insecurity is a major challenge. We have lost between 56 to 60 percent of our members in the North-East due to insecurity. They have stopped production,” he said.
He highlighted the financial burden of security expenses, noting that it surpasses tax payments. “Insecurity is a serious challenge. It is a disincentive to manufacturing and other businesses, and the government needs to intensify its efforts.”
Ajayi-Kadir remarked on the tough business environment in Nigeria and called for prompt action to address issues arising from President Bola Ahmed Tinubu’s reforms.
“We needed to float the forex rate and remove the subsidy, but how do we manage the negative fallout? How do we ensure business survival?” he questioned. He emphasized the importance of effective and truthful engagement with industry operators to minimize the adjustment period and achieve reform objectives with less pain.
“These are tough times, and we need all hands on deck. Government cooperation with stakeholders is essential to navigate this challenging period, not only for businesses but for individuals as well,” he explained.
Ajayi-Kadir stressed the necessity of a synergy between the private and public sectors to make progress, highlighting the government's duty to ensure adequate security policies and measures.
He noted that the manufacturing sector's underperformance is not due to a lack of competent entrepreneurs but due to environmental constraints. He pointed to electricity tariffs as a critical issue requiring resolution between the government and the private sector.
“We understand that costs cannot remain static. We are not opposed to tariff increases, as all prices have risen. Power suppliers are businesses too, and their costs are increasing,” he said.
Ajayi-Kadir called for adherence to processes to ensure value for money. “Power is not charity; there must be engagement and adherence to laws and regulations. Following these processes will enable DISCOs to operate, manufacturers to produce competitively, and ordinary Nigerians to have access to power.”
He concluded, “It is essential for all parties—DISCOs, manufacturers, and consumers—to benefit. I must be able to buy power, produce, compete, be profitable, and operate effectively.”
