The recent removal of fuel subsidy and the devaluation of the Naira have severely impacted manufacturers in Nigeria, leading to a significant decline in tax revenues as well as operational challenges. Since the removal of fuel subsidies on May 29, 2023, fuel prices have surged by approximately 193 per cent, causing a ripple effects across various sectors. Manufacturers are particularly affected as the rising costs of fuel and raw materials have led to increased production expenses.
Reports indicate that tax revenue from manufacturers plummeted by over 70 per cent in the first quarter of 2024, highlighting the financial strain on the industry. Additionally, Naira’s devaluation has made imports more expensive, exacerbating inflation and reducing purchasing power among consumers. This has resulted in a decline in demand for manufactured goods, further crippling the sector.
Analysts predict that the combination of these economic policies will continue to fan inflationary pressures, making it increasingly difficult for manufacturers to sustain operations and profitability. The Nigerian government faces mounting criticism for the abrupt implementation of these policies without adequate safety nets for affected citizens and businesses, raising concerns about the long-term viability of the manufacturing sector in the current economic climate. Commenting on the situation, the managing director of Coleman Wires and Cables Industries Limited, George Onafowokan, described 2024 as a cha.