According to a report, made available to newsmen by MAN on Friday in Lagos, the aggregate MCCI for the first quarter of 2020 dipped to 44.4 points from 51.9 points recorded in the fourth quarter of 2019.
The 7.5 per cent decline was attributed to anxiety in preparation toward eventual lockdown of the economy.
According to the report, the huge decline in the index underscored a near collapse of the manufacturing sector and a resounding vote of low confidence in the economy from manufacturers.
It also showed that the manufacturing sector was in a precarious state and required a lifeline to recover fully from the impact of the outbreak of the COVID-19, a respiratory disease caused by the new coronavirus.
MAN, therefore, urged government to declare a state of emergency in the manufacturing sector and immediately place the sector on an integrated policy ventilator through the provision of comprehensive support systems and stimulus packages.
This, the association said, would swiftly return the sector to the path of sustained production.
“It is also now conspicuous that inherent capacities and inadequacies, that were hitherto not obvious, are now being revealed in the face of this unexpected sweeping change.
“Consumer perception, taste, work pattern, preferences, demographics, expectations and choice of market place would also greatly change and increased virtual lifestyle has become the new order.
“It is, therefore, important and urgent for the government to declare a state of emergency in the manufacturing sector,’’ the report read in part.
Examining the components of the aggregate index, the indexes of current business condition in Q1 2020 fell to 46.56 per cent from 55.6 per cent recorded in Q4 2019.
Index of business condition for the next three months also fell to 48.6 per cent from 60.1 per cent of Q4 2019.
Likewise, current employment condition recorded 35.7 per cent in Q1 2020 as against 36.2 per cent in Q4 2019.
Furthermore, employment condition in the next three months fell to 41.4 per cent in Q1 2020 from 42.8 per cent recorded in Q4 2019.
Similarly, the index of production for the next three months fell to 49.8 per cent in the quarter under review from 64.7 per cent recorded in Q4 2019.
The association stressed that some legacy business strategies scenario template would have to change to accommodate innovation that would replace the old order and facilitate the designing of an all-weather resilient business model.
Apart from declaring a state of emergency in the sector, MAN recommended that government establish a special bailout fund for the sector with set deliverable on the number of jobs to be created, the volume of export, quantum of locally raw materials utilised and projected revenue.
To reduce the financial pressure on companies, occasioned by COVID-19, MAN urged government to compensate manufacturing concerns that were forced to shut down with 60 per cent of employees’ salaries for at least three months to prevent laying off workers and heighten massive unemployment.
“Government should reverse the Value Added Tax (VAT) rate back to the pre-2020 finance act rate and reduce the personal income tax (PIT) to a flat rate of 10 per cent for one-year, effective April 2020.
“All regulatory agencies, especially Standards Organisations of Nigeria (SON) and National Agency for Food and Drugs Administration & Control (NAFDAC) should be directed to reduce their respective administrative charges to Pre-COVID-19 rates, payable by manufacturing concerns by 50 per cent,’’ the report also read in part.
The News Agency of Nigeria reports that the MCCI was created to gauge the pulse of the economy on a quarterly basis.
Edited By: Kamal Tayo Oropo/Abdulfatah Babatunde (NAN)https://nnn.ng/covid-19-man-urges-sectoral-state-of-emergency-as-mcci-falls-below-50/