Four major blue-chip Nigerian companies lost as much as N51.86 billion in the first half of 2016 due to the increasing cost of doing business.
Industrialists have consistently complained of the cost of generating their own power and high interest rate among others, noting that the hope of the manufacturing sector was getting bleaker by the day as their earnings dim, Leadership reports.
Nestlé Nigeria Plc, Nigerian Breweries Plc and Lafarge Africa all suffered combined profit losses to the tune of N51.86 billion in the first half of 2016.
Bello said:“In the period under review, the companies struggled between balancing rising input cost pressures and passing the inflationary pressures on already constrained consumers by raising the prices of some products during the period.”
“Some of the input cost pressures being encountered by many manufacturers border on foreign exchange losses on dollar loans, the inability to access foreign exchange, the high cost of production as well as poor electricity supply and tariff hike.”
“Others are prolonged gas supply shortages across Nigeria, which forced companies to rely on the more expensive backup, low pour fuel oil (LPFO), monetary policies and constrained consumer purchasing power,” he said.
The national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, Mr Bassey Edem, also raised the alarm that the real sector was wreathing from the burden of soaring costs of production in a state of near-economic stagnation, even as the sector was faced with the prospects of being the base by which the government hopes to obtain tax revenue to finance Nigeria’s ailing economy.
According to Edem, the effort of the federal government in addressing the challenges have not translated into measurable positive indicators.
