Cement sales drop 30% over naira redesign, says MAN

At the height of the naira crisis earlier this year, the Manufacturers Association of Nigeria reported a 30% decline in cement sales.

According to the association, sales of consumer goods fell by 20% during this time due to a lack of access to cash.

The devastation caused by the naira redesign policy on the manufacturing sector was described in detail in a “Special Focus” of MAN’s Manufacturing CEOs Confidence Index, according to MAN.

According to the report, because of the significant progress that has been made in this area, the Central Bank of Nigeria does not need to hasten the country’s shift to a cashless economy or engage in overly aggressive policymaking.

Approximately 20% and 30% less sales of consumer goods and cement, respectively, were experienced as a result of the protracted crisis, the report claims, nearly bankrupting manufacturing companies.

According to MAN, the crisis had a negative effect on the manufacturers because it directly reduced their working capital, which halted regular business operations.

It was further stated that the devaluation of the naira reduced consumer support for manufacturing companies and as a result increased their volume of inventories, particularly for retail goods.

The economic crisis had negative effects on the manufacturing value chain and logistics costs, according to the report, because it exposed the heavily cash-based distributive trade sector to significant risk.

Part of the report’s summary stated, “The significant decline in money velocity created room for speculation and sparked the emergence of a naira black market, adding to the problems already faced by manufacturers due to a lack of foreign exchange.

In particular, those in the agro-allied industries, which frequently do business with local farmers in outlying towns with no formal banking in sight, were clearly destroyed by the naira shortage because their cash-based transactions were so prevalent. More regrettably, the outrageous POS fees on such cash limited the operations of hardy manufacturing SMEs and increased their cost of doing business.

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