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Power and Naira fluctuation menace, and the manufacturing sector of the Nigerian economy (1).

The financial reports especially the ‘Trading, Profit and Loss’ account of a typical manufacturing company or group is normally characterized by a huge fraction of the operating cost attributable to raw materials and power. Going by this fact, any significant fluctuation in the cost of these could make or mar any company that predominantly engages its resources in manufacturing activities. Most manufacturing industries in Nigeria, have the bulk of their raw materials imported from foreign countries. This shows that at the moment, the erratic depreciation of the Nigerian naira against the United State’s dollar, the dollar being the major currency for international transactions; and at such, threatening to the Nigerian secondary manufacturing sector.

Somehow, the only companies that could be said to be relatively free from this heavy dependence on imported raw materials ‘threat’ are those in the cement industry, which includes the likes of West Africa Portland Cement Company Plc (WAPCO) and Benue Cement company Plc (BCC), having locally sourced ‘lime stone’ as their chief raw material. Also the agricultural and some agro-allied industry companies, in the likes of Okitipupa and Okomu oil, having oil palm seedling as their major raw material; while fertilizer is most times subsidized as an incentive from the government for investing in the agricultural sector. One could as well, add companies that fall into the primary production sector of the economy, that is to say industries that extract their products directly from land (nature), including: petroleum industry, mining and agriculture. These may not be heavily exposed to the fluctuating foreign exchange rate menace, with respect to imported raw material, cost items

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