BY VICTORI ONU, ABUJA
DESPITE the shutdown of the economy, induced by the outbreak of the Coronavirus pandemic, the earnings of manufacturers recorded a significant increase during the first nine months of this year, investigations by THE POINT have revealed.
The Coronavirus pandemic had led to policy actions that affected government’s finances, led to capital flow reversals and loss of income to businesses and households.
Analysis of the Gross Domestic Product report for the third quarter of this year showed that the sector recorded improved performance as against the same period of 2019 when there were no restrictions in movement.
For instance, between January and September this year, the total monetary value of the manufacturing sector’s output was put at N13.51trn.
An analysis of the Gross Domestic Product report, as obtained from the National Bureau of Statistics, showed that the monetary output of N13.51trn represented an increase of 9.9 per cent when compared to the N12.29trn recorded in the first nine months of last year.
There are 13 sub-sectors in the manufacturing sector. Out of these 13 sub-sectors, six recorded increase in economic performance during the review period, while seven sub-sectors recorded decrease in productivity.
The six sub-sectors that recorded increase in economic performance are: Cement, which recorded an increase of about N790bn, from N1.6trn to N2.39trn; Food, Beverages and Tobacco, which rose by N590bn, from N4.66trn to N5.25trn; Textile, Apparel and Footwear, from N2.81trn to N3.01trn; Chemical and Pharmaceutical, from N148.43bn to N173.78bn; and Motor Vehicles, which rose from N130.87bn to N335.47bn.
On the other hand, sub-sectors that recorded a decline in output are: Oil Refining, from N103.33bn to N37.45bn; Wood and Paper Products, from N325.03bn to N324.55bn; Plastic and Rubber, from N677.37bn to N370.8bn; Electronic and Electrical, from N515.45bn to N448.01bn; Basic Metals, from N11.68bn to N9.61bn; Pulp and Paper Products, from N354.89bn to N335.47bn.
The Federal Government, in its Economic Recovery and Growth Plan, had said it would pursue manufacturing promotion policies that would enable the sector to record an average annual growth rate of 8.48 per cent between 2018 and 2020.
This is expected to rise from -5.8 per cent in 2017 to 10.6 per cent by 2020. The ERGP was expected to build on the Nigeria Industrial Revolution Plan, to address the key challenges in manufacturing.
Some of these challenges are limited access to credit and financial services, poor infrastructure and unreliable power supply that force businesses to rely on generators, thus increasing their input costs and reducing their overall competitiveness and profitability.
Speaking on the economic output, the President, Abuja Chamber of Commerce and Industry, Adetokunbo Kayode, said to unlock the potentials of the manufacturing sector, the government must continue to collaborate with the private sector to stimulate the sector.
He also said the attention currently being paid to crude oil should be reduced while efforts should be focused on developing the crude oil value chain.
He said, “Our GDP will continue to go up if we continue to place less emphasis on oil. Why did we go into recession? It was because the price of crude oil was going down.
“It’s not that we are not productive as a country but we need to take our eyes away from crude oil. We need to emphasise opportunities, open new doors.
“We are not a poor country because we are potentially rich. We are depending on crude oil without focusing on the oil value chain; we import diesel, petrol and petrochemicals.
“This is unbelievable. What is difficult in turning these into opportunities for people? Let’s leave oil where it is, develop the value chain and stimulate our manufacturing sector.”
Speaking on the development, the immediate past Director-General, Abuja Chamber of Commerce and Industry, Chijioke Ekechukwu, said that the government needed to step up its diversification agenda with credit policy for manufacturers.
He said while the government had been pursuing the economic diversification since the inception of this administration, the results had not been too impressive, based on recent GDP report released by the NBS.
Apart from agriculture, particularly crop production, he said oil was still the leader in terms of income to Nigeria.
To simulate the economy, Ekechukwu said there was a need for more reforms to further reduce the cost of doing business and interest rate.
Ekechukwu said, “The non-oil sector on its own has the capability to drive the economy in case the price of oil that is not within our control starts declining.
“So there is a need to put in more efforts in agricultural development, boosting the export market and the manufacturing sector.”
The Central Bank of Nigeria had said the manufacturing sector was gradually recovering from the COVID-19 induced six months consecutive plunge, as the Purchasing Managers Index hit 50.2 points in November.
The growth represents 0.6 points increase from the 49.4 points recorded in October.
The November growth beats the 50 points threshold which indicates Africa’s largest economy is generally expanding.
The apex bank said out of the 14 sub-sectors surveyed, eight of them grew above the 50 per cent threshold.
