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Industrial sector diminution raises concerns

Industrial sector diminution raises concerns
Photo by Ivan Bandura- Ask Nigeria

The industrial sector has diminutive drastically in its contribution to the GDP.

Growth in Nigeria’s industrial sector has come under scrutiny as the country’s economy has faltered. Many different sectors fall within this category, such as mining, manufacturing, and construction, among others. Stakeholders are concerned that the industrial sector will continue to diminish in the near future, given the Central Bank of Nigeria’s (CBN) contractionary monetary policy measures in response to the rising inflation. Concerns have also been raised over the possibility of long-lasting effects on the industrial sector and the subsequent rise in inflation.

Stakeholders further noted that the steady diminution in the sector, which pose a hindrance to the manufacturing sector, calls for an exigent efficacious resolution and intervention from the government. According to a report released by the National Bureau of Statistics (NBS), Nigeria’s industrial sector has diminished drastically to the barest in its contribution to the GDP in seven years. In the third quarter of 2022, the GDP growth number fell drastically to 2.25 percent from 3.54 percent in the second quarter. This exemplifies the myriad of challenges besetting the Nigerian economy.

The GDP from the industrial sector declined by 8 percent.

Notable in the GDP data for the third quarter was the 1.91 percent decline in productivity in the manufacturing sector. Since the Economic Crisis of 2020, when the economy hit a downward spiral, this is the first quarter that manufacturing has contracted. The food and beverage industry declined by 4.05 percent, making it the first industry to decline since the recession of the second quarter of 2020 and the sixth consecutive quarterly recession to be recorded.

Nigeria’s industrial sector showed a -8% GDP decrease in quarter three of 2022, according to NBS data. Service-oriented enterprises have an advantage in the Nigerian economy, given that they depend less on the nation’s road network to generate production. Stakeholders claim that Nigeria’s food and beverage industry is still the country’s manufacturing sector’s shining beacon and a favorite among stock market investors. In the third quarter of 2022, the industry contributed N2.2 trillion to the country’s GDP.

Restructuring and intervention may revitalize the economy and industries.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), warned that a slowdown in the manufacturing sector would have severe consequences for food security, employment, and inflation. He asserts that the food processing industry has the most significant impact on employment because of its high backward integration content and multiplier effect in the agricultural value chain. In his view, the sluggish economy and afflicted industries may be revitalized with the appropriate form of restructuring and intervention measures.

Furthermore, Dr. Yusuf highlighted some of these intervention measures, among which are fixing the macroeconomic headwinds of high inflation and currency volatility, addressing the structural impediments to production and other economic activities, reforming the foreign exchange market to inspire investors’ confidence, addressing the challenges of insecurity and logistics, taking urgent steps to tame inflation and boost the purchasing power of the citizens and deploying fiscal reforms which prioritize infrastructural development and transparency in the budgetary process.

Energy crisis and short exchange hindered industrial expansion.

In addition, the Manufacturers Association of Nigeria (MAN) solicit the Nigerian government to devise a resolution to address the factors fueling impediment towards the manufacturing indicators. Segun Ajayi-Kadir, MAN Director-General, who disclosed this, emphasized the adverse effect of the inadequate foreign exchange and the energy crisis has hindered the manufacturing growth output from 5.8% in the first quarter of 2022 to 3.0%. He noted that the rising energy cost adds to the string of woes affecting the manufacturers and the country’s importation.


Related Link

NBS: Website

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Abusi
Member
8
1 month ago

Inflation and particularly lack of good economical policies have made the industrial sector to decline. They lost a whopping 8% reduction from their former rate. Our industries thus need to produce more to generate more revenues.

Member
9
1 month ago

Industrial sectors in Nigeria has not really been spontaneous when we talked contributing quota or improving the economy and stake holders and government needs to be proactive and do more in order to boost the economy.

Member
9
1 month ago

The federal government need to do something urgent because this is the sector that employ millions of people and if anything happen to this sector the economy will really be affected in a bad way.

Member
8
1 month ago

As a result of the decline in the economy of Nigeria, the expansion of the country’s industrial sector has come under examination, and the country’s government ought to endeavor to improve the situation.

Member
8
1 month ago

Long-term consequences on the manufacturing sector and the consequent rise in inflation have also been cited as potential sources of concern.

Member
8
1 month ago

The persistent decline in the sector, which acts as a barrier for the manufacturing industry, necessitates an immediate, effective solution and intervention from the government.

Member
8
1 month ago

The lagging economy and the industries that have been affected may be resuscitated if the appropriate sort of restructuring and intervention measures are put into place.

Member
8
1 month ago

Considering the central role in the agricultural value chain and its high backward integration content, the food processing industry has a particularly large impact on employment.

Member
8
1 month ago

Actions to reduce inflation and increase consumers’ purchasing power, as well as fiscal changes that give top billing to infrastructure investment and openness in the budgeting process, are urgently needed.

Member
8
1 month ago

The ever-increasing price of energy is the latest in a long line of problems that have been plaguing the nation’s manufacturers and importers.

Member
8
1 month ago

Investors in Nigeria’s stock market consider the food and beverage industry to be a top pick because it continues to be the shining beacon of the manufacturing sector in the country.

Member
8
1 month ago

it’s crazy that Industrial sectors in Nigeria have not exactly been spontaneous when we have discussed contributing quotas or enhancing the economy and stakeholder relationships.

Member
8
1 month ago

Energy crisis and short exchange hindered industrial expansion. the Nigerian govt should devise a resolution to address the factors fueling impediment towards the manufacturing indicators.

Member
8
1 month ago

Stakeholders and the government in Nigeria need to be more abrasive if they want to improve the country’s industrial sectors and contribute their fair share to the economy.

Member
8
1 month ago

This kind of sector anything should not happening to it the government need to intervene before it affect the economy and it will make things more bad the stakeholder and the government need to working in hand in hand if the country industrial sector want to improve

Member
8
1 month ago

The administration of President Buhari has not in anyway benefited this nation. Government policies are what killed a lot of industries in the last 7 years

Member
9
1 month ago

The industrial sector has diminutive drastically in its contribution to the GDP. The country industry has not really done very. More work is needed because Nigeria is not industrialize yet

Member
8
1 month ago

Stakeholders in industrial sector can only do little. To enable the industries to meet up to the required GDP our Federal Government needs to enact policies that suit industrial growth.

Member
8
1 month ago

The industrial sector in Nigeria has dramatically declined, making the smallest GDP contribution in seven years. The GDP growth rate in 2022 dropped dramatically from 3.54 percent in the second quarter to 2.25 percent in the third quarter.

praise
Member
1
1 month ago

According to stakeholders, Nigeria’s food and beverage sector continues to be the nation’s manufacturing sector’s shining beacon and a favorite among stock market investors.

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