Nigerian manufacturers have pointed to the high cost of diesel as the primary reason for the soaring prices of goods in the country. Segun Ajayi-Kadir, the Director General of the Manufacturers Association of Nigeria, highlighted the significant impact of diesel costs on manufacturers’ profits, stating that it consumes a staggering 80% of their earnings.

In a recent statement addressing the surge in prices, Ajayi-Kadir emphasized that the exorbitant cost of production is directly contributing to the escalating prices of goods across Nigeria. He urged the government and relevant agencies to take action to alleviate the burden of high operating costs on local manufacturers.

“It is important to understand the challenges that manufacturers are facing. Diesel prices alone are crippling our industry, with manufacturers spending around N1,700 per litre. This astronomical cost of energy production is simply unsustainable, forcing manufacturers to increase prices to stay afloat,” Ajayi-Kadir explained.

In addition to the soaring diesel prices, manufacturers are also grappling with other obstacles such as the new customs exchange rate, high interest rates, foreign exchange scarcity, NAFDAC bans, and more. These combined challenges are making it increasingly difficult for manufacturers to operate profitably.

However, there is a glimmer of hope on the horizon. The recent introduction of diesel sales by the Dangote refinery has led to a significant reduction in diesel prices, offering much-needed relief to manufacturers. Aliko Dangote, the founder of the refinery, announced that the entrance of their product into the market has already resulted in a price drop from N1,700 per litre to N1,200.

Despite this positive development, the economic challenges persist, with the March inflation rate climbing to 33.20% from 31.70% in February. The road ahead remains uncertain for Nigerian manufacturers, who continue to navigate a complex landscape of high operating costs and economic instability.