JUST IN: Nigeria’s Economy Receives A Deadly Blow, As President Muhammadu Buhari, VP Yemi Osinbajo, Run Out Of Great And Innovative Ideas

By Joshua Amaugo June 5, 2018 08:03

JUST IN: Nigeria’s Economy Receives A Deadly Blow, As President Muhammadu Buhari, VP Yemi Osinbajo, Run Out Of Great And Innovative Ideas

Nigeria’s manufacturing sector has suffered another huge setback, as it recorded a decline of about N30 billion in output in the first quarter of 2018.

According to figures obtained from the National Bureau of Statistics, NBS, the Gross Domestic Product, GDP, showed that the sector recorded a total output of N2.66 trillion at the end of the fourth quarter of 2017.

Comparing the figure to N2.63 trillion in the first three months of this year, the level of productivity in the sector dropped by N30 billion, as it was badly hit by a harsh business operating environment, orchestrated by President Muhammadu Buhari’s lack of innovative ideas.

Recall, that there are 13 sub-sectors that make up the manufacturing sector. Out of the 13 sub-sectors, five recorded increase in economic performance between December 2017 and March this year, while eight recorded decrease in productivity.

The five sub-sectors that recorded increase in economic performance are: cement, from N228.8 billion in December to N251.8 billion in March 2018; wood and wood products, from N78.85 billion to N82.14 billion; pulps and paper products, from N23.67 billion to N23.77 billion; non-metallic products, from N104.17 billion to N110.21 billion; and motor vehicle assembly, from N16.48 billion to N19.64 billion.

The sub-sectors that recorded decline in productivity include: oil refining, from N42.69 billion to N41.55 billion; food, beverage and tobacco, from N1.21trillion to N1.19 trillion; textile, apparel and footwear, from N642.55 billion to N610.64 billion; and chemical and pharmaceutical products, from N58.91 billion to N55.23 billion.

The rest are: plastic and rubber products, from N84.59 billion to N83.99 billion; electrical and electronics, from N1.9 billion to N1.4 billion; iron and steel, from N66.68 billion to N58.82 billiob; and other manufacturing, from N109.53 billiob to N105.93 billion.

Finance Experts speaking on the development, said that while the economy might have returned to positive growth, there were structural challenges that needed to be addressed, so as to improve the momentum of the manufacturing sector.

One of such is the structure of the economy, which is yet to be fully diversified, adding that, high interest rates being charged by Banks were affecting the productive capacity of the manufacturing sector.

Mr. Ganiyu Ogunleye, a former Managing Director, Nigeria Deposit Insurance Corporation, had while reacting to the report, said: “The fact that we are out of recession does not mean all is well, as we still have some fundamental problems in our economy.

“The structure of the economy itself is a challenge, because you know that we have relied heavily on the oil sector, and efforts are on to diversify the economy away from oil, and that cannot happen overnight; it is going to take time.

“So, for us to sustain our economy, particularly now that we are out of recession, we have to focus on agriculture, which I believe can lead to food sufficiency, create a lot of jobs, and can also provide raw materials for the industrial and manufacturing sectors.

“So, if we focus on agriculture, we will be able to sustain our economy on a long-term basis, and the other sectors too, such as power, should also be given adequate attention by the government.”

Buttressing Ogunleye’s statement, the immediate past Director-General, Abuja Chamber of Commerce and Industry, Dr. Chijioke Ekechukwu, said that while the government had been pursuing economic diversification since the inception of this administration, the results had not been too impressive, based on the recent GDP report released by the NBS.

He said that apart from agriculture, particularly crop production, oil was still the leader in terms of income to Nigeria.

“The country came out of recession as a result of an improved production capacity, and improved international oil prices. These two major reasons are actually out of the control of the government, and so achieving that feat cannot be said to be a better plus, because if that situation had not happened, it is possible that we will not have been out of recession.

“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, as well as boosting the export market and the manufacturing sector”, Ekechukwu noted.


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