Improved access to raw materials bolsters manufacturing sector growth in Q1

Significant improvement in access to foreign exchange for purchase of raw materials, as well as allocation to sectors with priority demands may have aided the sector’s Gross Domestic Product (GDP) growth in Q1 2018.

According to the National Bureau of Statistics, real GDP growth in the manufacturing sector in the current quarter of 2018 was 3.39% (year on year), higher than the same quarter of 2017 and the preceding quarter by 2.03% points and 3.26% points respectively.

Similarly, growth rate of the sector on a quarter-on-quarter basis was -3.16%. The contribution to real GDP in Q1 2018 was 9.91%.

Manufacturers and service providers had reported sustained improvement in overall business conditions since April and May 2017 respectively, as the Manufacturing PMI in the month of April stood at 56.9 index points, indicating expansion in the manufacturing sector for the thirteenth consecutive month.

Similarly, the composite PMI for the non-manufacturing sector stood at 57.5 points last month, indicating expansion in the Non-manufacturing PMI for the twelfth consecutive month.

Based on the NBS stratification, the manufacturing sector is comprised of thirteen activities: 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; and Other Manufacturing.

Nominal GDP growth of manufacturing in the first Quarter of 2018 was recorded as 8.93% (year-on-year), -7.70% points lower than figures recorded in the corresponding period of 2017 (16.63%) and –0.27% points lower than the preceding quarter figure of 9.20%. Quarter on Quarter growth of the sector is recorded at -1.04%.

The contribution of manufacturing to nominal GDP was 9.27%, lower than growth recorded in the corresponding period of 2017 at 9.31% but higher than the 8.53% recorded in the fourth quarter of 2017.

MAN President, Dr. Frank Jacobs had earlier stated that the association’s deliberations with the government, especially at the quarterly meetings, contributed immensely to recent positive policy measures of the Government, some of which are already yielding results.

“Secondly, significant improvement in Foreign Exchange (Forex) management policies of the Central Bank of Nigeria, which did not only improve forex supply but also made allocation to the sector a priority, at that time, was as a result of our sustained engagement with the Central Bank Governor”.

He added that MAN will continue to ensure greater improvement in the business operating environment, including abolition of multiple taxation and its unorthodox mode of collection by the three tiers of Government; enactment of relevant manufacturing-friendly laws and abrogation of adverse and obsolete business related legislations; and encourage the sustenance of the campaign for patronage of Made-in-Nigeria products and advocate for sector-specific incentives for national economic development.