Operators in the manufacturing sector have said that they are not surprised that the sector’s contribution to the nation’s gross domestic product (GDP) in the 3rd quarter of 2016 slid to 8.59 per cent which is lower than the 9.67 per cent recorded in the corresponding period of 2015.
The operators who were reacting to the recent Nigeria GDP report by the National Bureau of Statistics (NBS) for the third quarter 2016, said they had expected something lower.
President of the Small Business Owners Association of Nigeria (ASBON), Dr Femi Egbesola, asked rhetorically: ‘With the inability of manufacturers to secure foreign exchange to procure their raw materials, what do you expect?’
The low result is partly due to the continued fall in the naira exchange rate, which makes imported inputs more expensive, thereby increasing business costs. The slow growth also reflected a drop from the second quarter of 2016 by 1.91 per cent which was recorded at –1.02 per cent. On a Quarter-on-Quarter basis, the sector grew by 8.49 per cent.
The report shows that the manufacturing sector has about 13 sub-sectors which include: Oil Refining, Cement, Food, Beverages and Tobacco, Textile, Apparel, and Footwear, Wood and Wood products, Pulp Paper and Paper products, Chemical and Pharmaceutical products, Non-metallic Products, Plastic and Rubber products, Electrical and Electronic, Basic Metal and Iron and Steel, Motor Vehicles and Assembly.
The NBS noted that the nominal GDP growth of the manufacturing sector in the third Quarter of 2016 was recorded at –2.93 per cent (year-on-year), 7.73 per cent lower than the 4.80 per cent recorded in the corresponding period of 2015.
Chief Executive Officer of Spectra Foods Limited, Chief Duro Kuteyi, said if the Nigerian government is really serious about diversifying the economy, it must encourage the manufacturing sector. In his words: “It goes beyond mere statements or pronouncements. The government must show that it is really serious by encouraging manufacturers otherwise we will keep going in circles.”