Manufacturing Business In Nigeria
Most manufacturing businesses find it difficult in Nigeria to strive because of many factors tied with the redundant nature of the economy. Nigeria is facing socio-political problems that stem from the economic problems which the country is going through.
The manufacturing industries of the nation are practically down and new one are not being set up because of the many difficulties that is affecting manufacturers or would be manufacturers. We’re going to look into some six factors that stand as stumbling blocks for manufacturing companies.
Six Factors That Affects Manufacturing Business In Nigeria
The following are the factors that affects manufacturing companies in Nigeria;
- FOREIGN EXCHANGE
- DISHONEST GOVERNMENT OFFICIALS
The first one is shortage of capital or funds to run effectively a manufacturing company or to set it up and to expand it. The many initiatives of government does not endure because of the poor handling by the government officials who demanded bribe or surreptitiously divert government fund to other things or for other use or lack of the political will to midwife the project into a success.
In the same vein, banks discrimination against low manufacturers and farmers and are reluctant to borrow them money.
They prefer to support importers and foreign exchange businesses. They created bottlenecks that make it impossible for manufacturers to get cheap fund but lend to them when they so decides at exorbitant rate.
Secondly, is the problem of labor. Many manufacturers have had their businesses destroyed by dishonest hands who see an opportunity to commence misappropriation of funds and self-enrichment immediately they have the notion that the business is prospering or not leading to anyway meaningful.
Thirdly, is the problem of energy supply. The government at various times had spent a lot of money to develop the industry but corruption had debarred its progress. The major cities endure an electricity supply of only eight to ten hours daily which hampers gainful production businesses.
Government policies had been less favorable for the independent development of energy supply and alternative electricity supply like solar is beginning to be expanded.
Fourthly, is the problem of transportation because of the high cost of fuel, transportation is so costly and it is the singularly most inhibiting factor after energy supply that is mitigating against any manufacturer in the country. Recently, the government began to invest heavily in rail transportation to ameliorate the hardship manufacturers experience due to the transportation of raw materials and manufactured goods.
The fifth factor is the foreign exchange regime which is ever so unstable and unpredictable. The current cost of the foreign exchange rate has risen by more than one hundred percent to what it was twelve months ago. Leading to a double-digit inflation ratio for goods that depends on foreign exchange to procure raw materials for the manufacturing lines.
Government policies on a foreign exchange had become so unpredictable in Nigeria, was intense in the nation (Nigeria) darting in and out of recession in recent times.
There are different types of the tax regime that a manufacturer has to endure to function.
DISHONEST GOVERNMENT OFFICIALS
Lastly, some government officials have created a dishonest engagement in what is sincerely expected of them faithfully involved but have disgracefully taken a shameful or corrupt1ble stands
This by no small means also adversely impacted negatively on the business activities in its entirety. All these are hindrances for manufacturers in Nigeria.
Nigeria has a high rating, amongst countries of which it is very difficult to do business in them but so fortunately by proactive and consistent policies formulated and measuring effects of the government of the day to such a glorious move, Nigeria scores an admirable point on the leagues of the nation to be one of the best destination with a considerable level on the ease of doing business and controversially acclaimed as the “biggest economy” in Africa with a shoulder standing and soaring higher like South Africa.
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