Despite Challenges, Manufacturers Express Confidence in Nigeria’s Economy
By Jonathan Eze in Cairo, Egypt
Manufacturers’ Perception Index of 66 points computed from a survey of over 800 manufacturing companies in Nigeria for the first half (H1) of 2018 has indicated that manufacturers still have confidence in the country’s economy.
The new report released yesterday by the Manufacturers Association of Nigeria (MAN) also showed that the economy improved in the second half (H2) of the year.
Quoting the Gross Domestic Product (GDP) by the National Bureau of Statistics (NBS), MAN stated that Nigeria’s real national output grew by 1.5 per cent in the second quarter of 2018, which indicates a 0.45 per cent point decline from 1.95 per cent growth recorded in the first quarter of 2018.
The association, however, stated that a 0.78 percentage point increase from 0.72 per cent was recorded in the second quarter of 2017.
The report also affirmed that the non-oil sector output grew by 2.05 per cent in the second quarter of 2018, thus showing 1.3 percentage point increase from 0.75 per cent growth recorded in the first quarter of the year.
It also indicated 1.6 percentage point increase from 0.45 percent of the second quarter of 2017.
According to the report, “Oil sector output grew by -3.95 per cent in the second quarter of 2018, an 18.72 percentage point decline from the growth rate of 14.77 per cent in the first quarter of 2018. It also shows that 7.48 percentage point decline from 3.53 per cent growth rate recorded in the second quarter of 2017.”
However, the real output growth in the manufacturing sector in the second quarter of 2018 was 0.68 per cent, marginally higher than the 0.64 per cent recorded in the corresponding quarter of 2017, but lower than 3.39 per cent of the preceding quarter by 2.71 percentage points.
It stated further that the performance of manufacturing sector in the first half of 2018 was strongly influenced by macroeconomic developments in the period.
“Generally, macroeconomic indices slightly improved in the period given the deceleration in inflation rate, growing external reserves, stable forex and the steady high crude oil price in the international market. However, consumption continued to dampen due to high commodity prices strongly induced by unfavorable exchange rate parity, its impact on cost of production and the general consumer real disposable income,” it said.
Consequently, in order to addresses the challenges and boost activities in the sector, MAN made the following recommendations: “Resuscitate domestic refining of crude oil in the country, ensure the operability of Independent Power Producers (IPP) for on/off grid power generation and the Micro Grid Initiative; re-classify the manufacturing sector into strategic gas users from the current commercial gas users classification; rehabilitate existing key road network across the country; and accelerate further commitment to the development of the railway system.”