By Rukayat Moisemhe
THE MANUFACTURERS Association of Nigeria (MAN) has expressed worry at the possible impacts of the increase in petrol price on the Nigerian economy, particularly the manufacturing sector.
The pump price of petrol was on Tuesday increased by over 50% depending on location in the country.
The Director-General of MAN, Mr Segun Ajayi-Kadir, expressed the worry in an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.
Ajayi-Kadir said that the increase in petrol pump price will lead to increase in transport fares and prices of goods and other services, stating that this could leave the citizens with less disposable incomes.
The director-general added that decrease in purchasing power would lead to reduced demand for non-essential goods and services, affecting businesses across sectors.
He said that the consequences might include rise in inflation figures which would negatively impact household budgets.
“One is naturally worried about the impact on the already lacklustre performance of the manufacturing sector. In particular, there is no doubt that it will add to production inputs and logistics costs. These will lead to higher prices and dwindling disposable income of the average Nigerian,” he said.
Ajayi-Kadir said that while the performance of the manufacturing sector would be negatively impacted, businesses might need to adjust their pricing, which could lead to reduced profit margins if consumer demand would weaken.
“Small and medium-sized enterprises, which often operate on thin margins, could be particularly hard-hit.
“The increased costs could force some to scale down operations or even shut down if they are unable to pass on the additional costs to consumers,” he said. (NAN)
