The Food, Beverage, and Tobacco sub-sector, accounted for 34 percent of the entire manufacturing sector in Nigeria and contributed approximately five percent to the GDP in 2022.
Mr. Ekuma Eze, the Head of Corporate Affairs & Sustainability at Rite Foods Limited, disclosed this during the 2024 annual general meeting of the Food, Beverage, and Tobacco Sectoral group of the Manufacturers Association of Nigeria, held in Lagos.
Eze was the guest speaker at the event, themed, ‘Cultivating Value: Employing Quality, Standards, and Innovation in Strengthening Food, Beverage, and Tobacco Manufacturing.’
He highlighted the significant roles being played by the sector in the economy, in spite of the significant challenges that hinder its competitiveness, stressing that structural and systemic obstacles have impeded the growth of manufacturing and its overall contribution to the economy.
“While the Food, Beverage, and Tobacco manufacturing sector holds the title as the largest sub-sector within manufacturing, it still falls short of global competitiveness.
“Locally, manufacturers face formidable challenges, including inadequate infrastructure, high inflation rates, energy shortages, forex instability, regulatory unpredictability, security concerns, and hefty tax burdens, all of which have significantly hampered the profitability of this sector in recent times,” he said.
He advocated for targeted government interventions to bolster the sub-sector’s competitiveness, especially in light of the African Continental Free Trade Area. “Our policies must actively promote manufacturing as a linchpin of economic progress.
Manufacturing ought to serve as a primary driver of economic expansion, job creation, income generation, and GDP contribution,” he added.
The Deputy Director at the National Agency for Food and Drug Administration and Control, Dr Aina Olugbenga Steven, commended the local manufacturers for their ongoing efforts in addressing challenges such as electricity tariffs and foreign exchange fluctuations within “Nigeria’s volatile, uncertain, complex, and ambiguous business environment.
The Director-General/Chief Executive Officer of MAN, Mr Segun Ajayi-Kadir, emphasised the crucial need for manufacturers to prioritise quality, standards, and innovation in their production processes to maintain relevance and meet consumer expectations.
He underscored the importance of collaboration among manufacturers to collectively drive a more substantial impact on the Nigerian economy. Ajayi-Kadir lamented the rise in electricity tariffs, citing its negative effect on an already challenged operating environment.
“Local manufacturers have shown remarkable resilience in the face of daunting macroeconomic and infrastructure challenges, particularly concerning power.
“However, manufacturers require access to electricity at a reasonable cost. Power constitutes approximately 40 per cent of our expenses, varying depending on the level of power intensity in the manufacturing process, ” he said.
New Leadership of FOBTOB
The other highlights of the event was the election of the new leadership of FOBTOB.
The leadership changed from Chief (Engr.) Patrick Anegbe, Managing Director/Chief Executive Officer of Intercontinental Distillers Limited to Mr. Chinedu Okereke, Managing Director of The La Casera Company (TLCC) Ltd., as the new Chairman of the sectoral group.