Nigerians Urged Not to Expect Immediate Drop in Prices Following Recession Exit

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Following the recent announcement by the National Bureau of Statistics, (NBS), on Tuesday, that Nigeria has exited its worst economic recession in more than two decades, notching up growth of 0.55 percent in the second quarter of 2017, National President of Manufacturers Association of Nigeria, (MAN), Dr. Frank Jacobs has said that Nigerians should not expect an automatic fall in the prices of goods and services, if certain key issues are not duly addressed by the Government.

Addressing journalists on Wednesday at a briefing in Lagos, on the 45th Annual General Meeting scheduled to hold between the 13 and 14 September 2017, Jacob stressed that, “It may be true to say that the economic growth rate of 0.55 percent is good. The question remains: is the growth real, is it sustainable and can it engender inclusiveness? the impact of a positive improvement like this should ideally be felt by all classes of citizens in our country before one can boldly assert that a growth experience is inclusive.”

He said, “MAN believes that, with an appropriate mix of policies and concerted efforts of all stakeholder, the growth rate would eventually become inclusive and impact the lives of over 180 million Nigerians.”.

Jacobs, while responding to questions stated that, even with the contribution of the manufacturing sector to the Gross Domestic Product’s (GDP’s) growth rate, exiting recession does not mean that prices will come down automatically, except when concerted efforts are made to address the challenges faced by manufacturers in the country.

According to him, “I don’t believe that recovery from recession meant that prices will come down, why prices are high is because of a fall in the value of naira to the dollar; and as long as it persists, prices won’t come down. Although with improved productivity in the agricultural sector, prices might come down due to competition but not as significantly as expected.”

He said, “As long as we depend on imported raw materials and machinery for manufactured goods, and buy dollar at the current exorbitant rate, it will be almost impossible for prices of manufactured goods to be lower than they are today, maybe, competition and interplay of the supply and demand, I don’t expect prices to change significantly.”

Jacobs believes that there is very little the Government can do on a short term basis to make Nigerians feel the impact of the exit from recession.

“I’m not sure there is anything the government can do for Nigerians to feel the impact unless there is a subsidy in the cost of goods, which looks impossible. But, if the operating environment is improved upon, maybe, the cost of production will come down and it will affect the prices of goods. If the government can work with Central Bank of Nigeria, CBN, to lower the current double digit interest rate, create enabling environment, have the right infrastructure in place, reduce the cost of funding. Once these are done, it might reduce the price of commodities, he said.”

“If a manufacturer can source funding at 5% today, the prices of products will come down. If there is no multiple taxations that manufacturers are subjected to, and there are good roads, then, things will improve”, he added.

The Daily Times gathered that the association’s AGM is expected to address topical issues on the ‘Recovery and Growth of the Nigerian Economy;’ while key stakeholders, like the Governor of the Central Bank, Godwin Emefiele and Comptroller General of the Nigeria Customs Service, Col Hameed Ali (rtd), are expected attend the meeting.

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