“Nigeria’s Manufacturing Sector Still Sick”
Despite optimism that the manufacturing sector will do better this year, things hadn’t exactly turned out as planned.
According to the executive summary of the 2017 economic review released by the Manufacturers Association of Nigeria, the manufacturing sector output grew by marginal 0.14% in the fourth quarter of 2017 up from -2.54% recorded in the corresponding quarter of 2016.
Some economists who reacted to this say it means the manufacturing sector still remains quite sick.
An economist at the University of Uyo, Prof Leo Ukpong told newsmen that “what this shows is that the manufacturing sector is still grappling with the same challenges that it has been grappling with for years.
“If anything, there are new problems; the same capital problem is still there, along with the logistics problems, bad port access roads and poor means of transportation.”
According to Yusuf, many of the manufacturers have not recovered from the currency depreciation of the past two years, which pushed up their costs.
He stated: “Import duty was not adjusted to accommodate the depreciation so, this pushed up the cost of their inputs as well.
“Prices of their products went up and demand dropped, creating room for all kinds of products to come in. Government has also not done enough to increase local patronage.”
Ukpong interpreted the situation to mean that the economy was not really growing.
“We are in a growth deficit and our manufacturing sector is operating at zero capacity,” he stated.