Nigeria’s manufacturing sector skilled a staggering decline in development, as its year-on-year (YoY) nominal GDP development plummeted by 90.11% within the third quarter of 2024.
That is in response to the most recent Gross Home Product (GDP) report by the Nationwide Bureau of Statistics (NBS).
The sector’s development fell from 36.59% in Q3 2023 to a mere 3.62% in Q3 2024, reflecting vital challenges throughout its sub-sectors and highlighting the pressing want for remedial measures.
What the info says
Regardless of recording a quarter-on-quarter development of 31.67% in nominal phrases, the sector’s contribution to nominal GDP dropped to 14.30% in Q3 2024, down from 16.18% in the identical interval the earlier yr.
The GDP report learn: “Nominal GDP development of the Manufacturing sector within the third quarter of 2024 was recorded at 3.62% (year-on-year), 32.97% factors decrease than the determine recorded within the corresponding interval of 2023 (36.59%) and 1.72% factors larger than the previous quarter determine of 1.91%.
“Quarter-on-quarter, development of the sector was recorded at 31.67% in the course of the quarter. The contribution of Manufacturing to Nominal GDP within the third quarter of 2024 was 14.30%, decrease than the determine recorded within the corresponding interval of 2023 at 16.18% and better than the second quarter of 2024 at 12.68%.”
Actual GDP development within the manufacturing sector was 0.92%, marginally larger than the 0.48% recorded in Q3 2023 however decrease than the 1.27% achieved in Q2 2024.
The sector’s actual contribution to GDP stood at 8.21%, a decline from 8.42% in Q3 2023 and eight.46% in Q2 2024.
The GDP report famous: “Actual GDP development within the manufacturing sector within the third quarter of 2024 was 0.92% (year-on-year), larger than the identical quarter of 2023 and decrease than the previous quarter by 0.44% factors and 0.35% factors respectively.
“The expansion charge of the sector on a quarter-on-quarter foundation stood at 6.74%. The Actual contribution to GDP within the 2024 third quarter was 8.21%, decrease than the 8.42% recorded within the third quarter of 2023 and decrease than the 8.46% recorded within the second quarter of 2024.”
The manufacturing sector contains 13 actions: Oil Refining; Cement; Meals, Drinks and Tobacco; Textile, Attire, and Footwear; Wooden and Wooden Merchandise; Pulp Paper and Paper Merchandise; Chemical and Pharmaceutical Merchandise; Non-metallic Merchandise; Plastic and Rubber Merchandise; Electrical and Digital; Fundamental Steel and Iron and Metal; Motor Autos and Meeting; and Different Manufacturing.
What you need to know
The sharp decline within the sector’s GDP development underlines the persistent structural and operational challenges going through producers in Nigeria.
These embody restricted entry to international change, excessive manufacturing prices exacerbated by erratic energy provide, and import dependency on uncooked supplies.
- The impression of those constraints has led to decreased industrial capability utilization, straight affecting job creation and export diversification efforts.
- Sub-sectors like meals, drinks, and tobacco—historically drivers of producing development—additionally confirmed restricted momentum, additional dampening total sector efficiency.
- Odiri Erewa-Meggison, the Chairman of the Export Promotion Group inside the Producers Affiliation of Nigeria (MAN), lately stated that the present interval is probably the most difficult within the historical past of the manufacturing sector.
- The Manufacturing Affiliation of Nigeria (MAN) additional reported a regarding development inside the business, revealing that about 767 manufacturing firms shut down operations whereas 335 skilled misery in 2023. This growth was attributed to varied financial difficulties, together with change charge volatility, rising inflation, and a normal worsening of the funding local weather.
- These adversities have taken a toll on the manufacturing sector, considerably impacting its efficiency and sustainability.
- The manufacturing sector’s struggles are reflective of broader financial points, together with challenges in energy provide, entry to finance, and infrastructural deficiencies, which have impeded the sector’s productiveness and development potential.
- Additionally, the persistent inflationary pressures and forex volatility have exacerbated these challenges, resulting in decreased shopper demand and better manufacturing prices.
Earlier this yr, MAN projected a tricky begin for the manufacturing sector in 2024 however anticipated enhancements in the direction of the third quarter.
The Director Normal of the group, Mr. Segun Ajayi-Kadir, stated that the prospect of restoration depends closely on implementing coverage stimuli and a synthesis of home development by way of export-focused and commerce methods.
This method is predicted to reinforce resilience, foster regular development, and make sure the sector beneficial properties vital traction this yr.
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