Lagos, May 26, 2022 Several indices of the manufacturing sector grew in the second half of 2021, says a report by Engr Mansur Ahmed, President, Manufacturers Association of Nigeria (MAN).
The report, released on Thursday, said manufacturing sector production increased to N3.73 trillion in the second half of 2021 from N2.36 trillion in the corresponding half of 2020; indicating N1.37 trillion or 58.1 per cent increase.
It, however, increased by N0.07 trillion or 1.9 per cent when compared with N3.66 trillion recorded in the preceding half, while production value in the sector totalled N7.03 trillion in 2021 as against N4.42 trillion in 2020.
Ahmed said the increase in the manufacturing production value in the second half of 2021 was associated with increased cement production due to the new BUA cement factory in Sokoto; the African Glass new factory and activities of the five new papermills.
“This is also highlighted by the increased production value in the non-metallic mineral products sector to N374.41 billion in the second half of 2021 from N74.18 billion and N249.79 billion recorded in the corresponding half in 2020 and the preceding half respectively,” he said.
Also, capacity utilisation in the manufacturing sector increased to 59 per cent in the second half of 2021 from 53.7 per cent recorded in the corresponding half of 2020; indicating 5.3 per cent increase over the period.
It increased by 6.6 per cent when compared with 52.4 per cent recorded in the preceding half and averaged 58.9 per cent in 2021 from 49.5 per cent average of 2020.
Ahmed attributed the increase in manufacturing capacity utilisation to the phasing of economic and social restrictions meant to contain COVID-19 pandemic and the full rebounding of economic activities globally within the period.
“In addition, there are increased capacities in the paper subsector brought in by five new paper mills that are into recycling of waste papers to produce cartons.
“Also, the additional capacities as BUA Group introduced a cement factory in Sokoko and the new African Glass Ltd. factory that produced glass products influenced the development.
“The performance shows that manufacturing is fast returning to the 2019 pre-COVID-19 level of activities in the country,” he said.
The MAN President revealed that investments in the manufacturing sector increased to N73.18 billion from N56.44 billion recorded in the corresponding half of 2020; indicating N16.74 billion or 29.7 per cent increase over the period.
Ahmed said it increased by N70.96 billion or 49.3 per cent when compared with N144.14 billion recorded in the preceding half with manufacturing investment totalling N217.22 billion in 2021 as against N118.52 billion in 2020.
“Manufacturing investment has been gradually recovering following the return of economic activities as the issues of COVID-19 pandemic are continuously resolved.
“In the last one year significant investment has been recorded in the Pulp, Paper, Printing & Publishing (6Ps) sector with the establishment of five new paper mills that are into recycling of waste papers to produce cartons.
“There is also the new BUA Group cement factory in Sokoko; and the new African Glass Limited factory that produced glass products,” he said.
Also, the total historical cumulative jobs in the manufacturing sector were estimated at 1,671,441 by the end of 2021, based on surveys conducted since 2013.
According to the report, a total of 8,508 jobs were created in the sector in the second half of 2021 as against 3,451 jobs recorded in the corresponding half of 2020 and 7,602 job created in the preceding half.
“The total net employment in the sector in 2021, after adjusting for job losses was 11,659 while net job losses in 2020 was 3,257.
“The trend indicates that manufacturing job is also rebounding following the gradual return of economic activities in the sector after a year onslaught brought by COVID-19 pandemic,” it read.
Ahmed said Foreign Direct Investment (FDI) recorded 107.81 million dollars in third quarter of 2021; translating to a pick up from the downward trend of FDI in the country since the fourth quarter of 2020.
He said the association’s data also revealed an increase from 77.97 million dollars recorded in the second quarter of 2021, which was the lowest level recorded for the past 11 years.
He noted that the report of the manufacturing sector’s FDI revealed an uptick in the third quarter of 2021 when compared with the data recorded in the last three quarters.
“Therefore, the third quarter figure of 107.81 million dollars indicate 29.84 million dollars or 38.27 per cent increase when compared with 77.97 million dollars recorded in the second quarter.
“The figure indicates a drop of 306.98 million dollars or 74.01 per cent when compared with 414.79 million dollars recorded in the corresponding quarter of 2020.
“The third quarter report of NBS revealed that the foreign Portfolio Investment increased to 1217.21 million dollars from 551.37 million dollars indicating, 665.84 million dollars or 120.76 per cent increase over the period,” he said.
Similarly, the figure revealed an increase of 809.96 million dollars or 198.89 per cent when compared with 407.25 million dollars recorded in the corresponding quarter of 2020.
“The FDI increased to 323.83 million dollars in the third quarter of 2021 from 68.03 million dollars recorded in the second quarter of 2021, thus indicating 255.80 million dollars or 376.01 per cent increase over the period.
“However, the report indicated 76.26 million dollars or 19.06 reduction when compared to 400.09 million dollars recorded in the third quarter of 2020,” said Ahmed.
He, however, said local raw materials utilisation in the manufacturing sector dipped to 51.7 per cent in the review period from 56.5 per cent in the corresponding period of 2020; indicating 4.8 per cent decline over the period.
He noted that since the full opening of the economy from COVID-19 pandemic, local raw materials and other manufacturing inputs had been relatively scarce and costly.
The MAN boss also said inventory of unsold finished products dipped to N224.63 billion in the second half of 2021 from N303.22 billion recorded in the corresponding half of 2020.
This, he said, indicated N78.59 billion or 25.9 per cent decline over the period.
“However, it increased by N9.8 billion or 4.6 per cent when compared with N214.83 billion recorded in the preceding half.
“Inventory in the sector totalled N439.46 billion in 2021 as against N577.61 billion recorded in 2020.
“The decline in inventory in the period under review was attributed to the recovering aggregate consumption following the gradual rebounding of economic activities as COVID-19 pandemic receded,” he said.