Manufacturers are forced to reduce quality to survive – Muda Yusuf
By Felicia Nwosu
Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry, has identified reduction in content, quality and hike in price adopted by manufacturers as survival strategy to respond to an increasingly challenging operating environment.
During an exclusive interview with MARKETING EDGE, Mr. Yusuf stated that in a bid to survive the economic hardship, many brands are now reviewing their operating models due to the fact that there are some products that once their prices are increased, the consumers walk away completely from them.
He suggested that the best strategy, while implementing short-term interventions especially for FMCG, is to reduce the quantity and maintain the price. “This is easier for brands to get away with rather than increasing the price which could lead the brand to lose its market share.”
The economic expert reasoned that brands will continue to do promotions for their products despite the high cost, and that the quest for survival is responsible for brands dealing directly with the consumers through online platforms instead of using various traditional media. He is of the view that promotions of products are most needed in difficult times to help push the products.
Mr. Yusuf while speaking on the implications of the devaluation of the naira and the reviewing of the Nafex rate by the Central Bank of Nigeria (CBN) to the economy, stated that the CBN’s action was not exactly devaluation of the naira, considering that the rate operating in the economy is far higher than what CBN has been referring to as the official rate, as well as lack of investors to earn foreign exchange into the economy.
Describing it as a commendable first step, he said: “The step that CBN has taken is to move towards the convergence of rates .It will increase liquidity and inspire much better confidence in investors. The beauty of the movement towards convergence is that it will reduce the problem of lack of transparency in foreign exchange management.”
Speaking further, he said: “Presently, the parallel market rate and the DDC rate is about N485 to the dollar, and many international transactions that are taking place within the country are done at the rate of N500 to the dollar, so the currency is already weak. What CBN is doing is just to move up its own rate, to reflect the reality that is on ground, so I will not call this devaluation.”
He called on the government to create a more enabling environment to enhance business operations to excel and also take an immediate action in tackling security challenges in the country to encourage investors.
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