Manufacturing Investment Hits N4.78tn In 6 Years
GILBERT EKUGBE
The Manufacturers Association of Nigeria (MAN) has stated that the estimated investment in the sector between 2013 and first half of 2019 is over N4.784 trillion.
The figure was based on data generated from surveys conducted by the association over the period.
According to MAN, the manufacturing sector investment stood at N238.45 billion in the first half of 2019, representing N67.11 billion (21.9 percent) declined from N305.56 billion recorded in the corresponding half of 2018, stressing that it also declined by N8.63 billion (3.5 percent) when compared with N247.08 billion recorded in the second half of 2018.
The investment in the period was affected by the late passage of the 2019 budget which affected capital expenditure implementation, poor economic support infrastructure, over-regulation and high cost of capital in the economy.
“In the first half of 2019, investment in Plant & machinery ranked highest with an investment worth N100.92 billion, though lower than N110.47 billion recorded in the corresponding half of 2018 higher than N72.98 billion recorded in the second half of 2018. Asset Under construction trailed with an investment worth N84.06 billion; Land and Building with an investment worth N40.35 billion; Motor Vehicle with an investment worth N7.97 billion; and Furniture and Fitting with an investment worth N5.15 billion in the first half of 2019,” MAN said.
“Across sectoral groups, Food, Beverage and Tobacco group ranked highest with an investment worth N73.95 billion in the first half of 2019, though lower than N86.94 billion and N123.13 billion recorded in the first and second halves of 2018 respectively. This trailed by Chemical & Pharmaceutical (N51.76 billion); Basic Metal, Iron & Steel (N33.06 billion; and Motor Vehicle & Miscellaneous Assembly (22.54 billion) in the period,” MAN added.
It also noted that at the end of the first half of 2019, an estimated 1,644,392 historical cumulative jobs were created in the manufacturing sector based on the information gathered from the various surveys conducted by MAN over time, maintaining that new manufacturing jobs in the first half of 2019 increased by 2674 and 3111 jobs from 9320 and 8883 jobs created in the first and second halves of 2018 respectively, while total job loss declined by 2753 from 6050 recorded in the first half of 2018 but increased by 710 jobs when compared with 2587 job losses in the second half of 2018.
“In the first half of 2019, Chemical & Pharmaceutical sectoral group accounted for most of the jobs created in the manufacturing sector with 2784 employments; Domestic/Industrial Plastic & Rubber trailed with 2331 jobs; Motor Vehicle & Miscellaneous assembly with 2121 jobs; and Food, Beverage and Tobacco with job worth 1449 in the period,” MAN noted.
Electricity supply, particularly from the Distribution companies though a core challenge of the manufacturing sector has been improving albeit marginally since the second half of 2018. Average hours of electricity supply in the first half of 2019 remained stable at 10 hours per day which was the same recorded in the preceding half.
However, the average number of power outage in the first half of 2019 increased to 5 times daily from the 4 times daily recorded in the second half of 2018.
Following the slight improvement in electricity supply to the sector, MAN said expenditure on alternative energy in the first half of 2019 declined to N32.68 billion from N43.18 billion and N49.92 billion recorded in the first and second halves of 2018 respectively.
Manufacturers lamented over the high cost of borrowing, saying that it has continued to be a perennial challenge to the manufacturing sector.
“In the first half of 2019, the interest rate charged to manufacturers stood at 22.5; it stood at 23.01 per cent and 21.4 per cent in the first and second halves of 2018 respectively,” MAN said.
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