Manufacturing records N6.99tn growth, resists harsh environment
Between December 2018 and December 2020, the aggregate monetary value of the manufacturing sector’s output rose from N12.45tn to N19.44tn.
This showed an increase of N6.99tn or 34.78 per cent in total manufacturing output within the two-years period.
The figures were arrived at after analysing the Gross Domestic Product report obtained from the National Bureau of Statistics.
The report also showed that out of the 13 subsectors that constitute the manufacturing sector, 12 recorded increase in economic performance between 2018 and 2020, while one subsector recorded a fall in productivity.
The 12 subsectors that recorded increase in economic performance included cement which recorded an increase of about N2.1tn from N1.34tn in 2018 to N3.44tn; food, beverage and tobacco which rose by N1.91tn from N5.33tn to N7.24tn, textile apparel and footwear from N2.96tn to N4.31tn, indicating a N1.35tn rise.
Also, the wood subsector rose by 26.61 per cent from N350.35bn in 2018 to N443.58bn; pulp, paper and paper products rose from N128.58bn to N255.2bn; chemical and pharmaceutical products from N279.93bn to N460.43bn; and non-metallic products rose by 89.7 per cent from N590.21bn to 1.12tn.
The report showed that plastic and rubber products sub-sector recorded an increase of about N215bn from N389.82bn in 2018 to N605.75bn, while electrical and electronics, basic metals, motor vehicle and other manufacturing grew from N9bn, N282.3bn, N114.02bn and N456.82bn to N13.86bn, N421.13bn, N489.66bn and N644.49bn respectively.
The subsector that recorded decline in productivity was oil refining which dropped from N210.65bn to N57.83bn, reflecting a N152.23bn decrease.
In 2017, the President, Major General Muhammadu Buhari (retd.), launched the Economic Recovery and Growth Plan, a medium-term plan for 2017 to 2020, to address the decline in economic growth recorded by the country in 2016.
Part of the objective of the ERGP was to boost average annual growth in the manufacturing sector by 8.48 per cent between 2017 and 2020, through promotion policies.
Thus, manufacturing output was expected to rise from -5.8 per cent in 2017 to 10.6 per cent by 2020. The ERGP was also expected to leverage the Nigeria Industrial Revolution Plan to tackle the key challenges in manufacturing.
Limited access to credit and financial services, poor infrastructure and unreliable power supply that forces businesses to rely on generators were some of the challenges.
Speaking on the challenges in the manufacturing sector, the Chief Executive Officer of SD&D Capital Management Limited, Mr Idakolo Gbolade, in a telephone interview, told one of our correspondents that the government needed to take a systematic approach to help boost the manufacturing sector.
“The government needs to take a systematic approach if it wants the manufacturing sector to compete favourably with other countries,” he said.
He further spoke on the need to enhance power supply in favour of manufacturing companies in a way that would save cost.
A Political economist and former presidential candidate, Prof Pat Utomi, asked the government to focus on clear strategies.
He said the government needed to stop overwhelming the sector with constantly-changing policies, which could discourage investors from exploring the manufacturing sector.
Utomi said, “We need to focus on clear strategies. One of the problems with Nigeria is the inconsistency of policies, which has made investors wary of making the kind of commitment that manufacturing requires and then facing a change of policies so quickly.
“If we are going to have a new growth strategy, we really desperately need to have some kind of limited industrial policies.”
He further advised the government to leverage its natural resources in dominating global markets and focus on driving an export-based economy, as this would further boost the manufacturing sector output.