Production in the manufacturing sector is recovering and, in an unfavorable environment, reaches N7tn

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In the third quarter of the year, the manufacturing sector recorded a total output of N 7.1 trillion.

The N7.1 tons is N1.7 tons higher than the N5.4 tons recorded in the second quarter of 2021.

This emerges from the data in the latest gross domestic product report published by the Nigerian Bureau of Statistics.

The production of N 7.1 trillion for the third quarter of 2021 also means an increase of N 1.6 trillion compared to the N 5.5 trillion recorded in the third quarter of 2020.

According to the report, 11 of the 13 manufacturing subsectors had positive economic performance quarter on quarter, while only two subsectors saw productivity decline.

The 11 subsectors that saw economic output grow include cement, from N 1.1 trillion in the second quarter of 2021 to N 1.7 trillion in the third quarter of 2021; Food, beverage, and tobacco products, from N1.9 trillion to N2.3 trillion; Textiles, clothing and shoes, from N1.1 tn to N1.4 tn; and wood and wood products, from N 107.6 billion to N 126.5 billion

Other subsectors are pulp, paper and paper products from N 70.7 billion to N 96.5 billion; chemical and pharmaceutical products from N149.3 billion to N168.5 billion; non-metallic products, from N346.2 billion to N448.4 billion; Plastic and rubber products, from N145.3 billion to N199.2 billion; Electrics and electronics, from N3.7 billion to N4.8 billion; Base metals, iron and steel, from N96.9 billion to N143.3 billion; and other manufacturing industries, from N 129.4 billion to N 255.8 billion.

The oil refining subsector recorded a significant drop in productivity from N 6.7 billion to N 7.8 billion in the reporting period.

Production in the motor vehicles and assembly subsector also fell slightly from N 255.3 billion to N 255.2 billion.

The growth in manufacturing in the third quarter of 2021 was seen despite numerous challenges for the industry highlighted by manufacturers and other stakeholders.

The President of the African Development Bank, Akinwumi Adesina, spoke at the 49th Annual General Meeting of the Nigerian Manufacturers’ Association in October, identifying high costs and an unreliable electricity supply as the main obstacles to production in the country.

He said: “The main challenge facing Nigerian manufacturing today is the very high cost and unreliability of the electricity supply.

“Load shedding and the uneven availability of electrical energy have led to high and uncompetitive manufacturing costs.”

Another challenge he listed was the ailing transport infrastructure, including ports, highways and railways.

Similarly, the Nigerian Manufacturers Association had complained that 45 percent of Nigerian manufacturers’ production costs were spent on electricity.

In terms of development, Dr. Seyi Adelowokan, an economist and head of the Department of Economics at Olabisi Onabanjo University, said the data on improved manufacturing performance was doubtful because it did not reflect the realities of the industry.

However, he pointed out that the inequality could be due to the fact that the Bureau did not adjust the data received for inflation.

“Another thing is that you know that there is inflation in Nigeria in general and if these numbers are estimated based on price changes and are not adjusted for inflation then the number will keep increasing because prices are increasing. ” he said.

Another economic analyst and the managing director / chief executive officer of Cowry Asset Management Limited, Mr Johnson Chukwu, stated that the growth in manufacturing was at best a base effect – the economy postponed after the devastating effects of the COVID-19. Pandemic on sectoral growth in 2020.

“So some of the growths we are seeing today are at best an offset, that is, a normalization that makes things the way they were before COVID-19,” he added.

He urged the government to address the manufacturing infrastructure deficit in order to improve the sector’s competitiveness and boost exports.

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