UPDATE: Manufacturing contribution to GDP falls to 10.13% ­– Report

The Real contribution to GDP in the first quarter of 2023 was 10.13 per cent, lower than the 10.20 per cent recorded in the corresponding period of last year, findings by The PUNCH show.

The latest report by the National Bureau of Statistics shows that the first quarter’s Gross Domestic Product figure was 8.72 per cent, indicating growth from the previous quarter’s 8.40 per cent.

The manufacturing sector comprises 13 activities: oil refining; cement; food, beverages and tobacco; textile, apparel, and footwear.

Others are wood and wood products; pulp paper and paper products; chemical and pharmaceutical products; non-metallic products, plastic and rubber products.

Also included in the list are electrical and electronic; basic metal and iron and steel; motor vehicles and assembly; and other manufacturing.

The report indicates that nominal GDP growth in the manufacturing sector in the first quarter of 2023 was 17.85 per cent (year-on-year), an increase of 6.13 percentage points over the figure recorded in 2022 (11.2 per cent) and an increase of 8.99 percentage points over the figure recorded in the preceding quarter (8.86 per cent). Quarter-on-quarter, growth of the sector was recorded at 5.05 per cent during the quarter.

The contribution of manufacturing to nominal GDP in the first quarter of 2023 was 15.70 per cent, higher than the figure recorded in the same period of 2022 at 15.06 per cent and higher than the fourth quarter of 2022 at 13.49 per cent.

Real GDP growth in the manufacturing sector in the first quarter of 2023 was 1.61 per cent (year-on-year), lower than the same quarter of 2022 and lower than the preceding quarter by 4.28 percentage points and 1.22 percentage points respectively. The growth rate of the sector on a quarter-on-quarter basis stood at 1.63 per cent.

The slight drop in manufacturing GDP is connected to the perennial challenges that have continued to bedevil the sector.

Earlier this month, MAN, in its Bi-Annual Economic Review report, said the manufacturing sector recorded a 52 per cent increase in unsold finished goods in six months.

This was despite a 32 per cent (N1.31tn) decrease in the manufacturing sector factory output in the second half of 2022 when compared with N3.99tn recorded in the preceding half of the year.

According to the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, a variety of unfavourable factors, such as a shortage of foreign exchange, increasing energy expenses, and other serious obstacles, have contributed to the stunted growth of the manufacturing sector.

Ajayi-Kadir also noted that due to the challenges confronting the sector, both local and foreign investors had lost confidence in the economy; and, as a result, have elected to withdraw investments in the sector.