The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture has revealed that no fewer than 800 companies were shut down in Nigeria between 2009 and 2011.
NACCIMA said this was as a result of the harsh operating environment in the country.
According to the President of NACCIMA, Herbert Ajayi, companies that are still in operation now also risk shutting down because there has been no improvement in the manufacturing environment.
In a paper he presented on Tuesday in Asaba, the Delta State capital, at the zonal workshop on economic diversification organised by the Revenue Mobilisation Allocation and Fiscal Commission, Ajayi said capacity utilisation in industries is between 30 per cent and 45 per cent on the average, with 100 per cent overhead costs.
He said the blame could be traced to “political and economic factors.”
He listed the factors militating against the manufacturing industry include poor infrastructure and epileptic power supply.
Ajayi said: “The manufacturing industry as a whole operates on more than 70 per cent of energy it generates, using generators; and operating these generators greatly increases the cost of manufacturing goods.
“For instance, in May 2010, the government announced a 1.3 billion-dollar fund to help banks extend credit to the manufacturing sector following the decline in available finance after the global economic crisis had set in.
“Notwithstanding this positive development arising from the reform process, the Nigerian economy, especially the manufacturing sector is still confronted by serious challenges, structural imbalance and lack of diversification.”
“The current government policies targeted at the real sector (manufacturing) are also inadequate and preventing the manufacturing industry from flourishing.”