The manufacturing sector’s contribution to the Gross Domestic Product (GDP) has dropped to the lowest
in four years in the first nine months of the year as operators battle to stay afloat amid rising operating
costs, data from the National Bureau of Statistics (NBS) has shown.
The sector’s contribution to the GDP in the third quarter of 2024 declined to 8.21 per cent from 8.42 per
cent in the corresponding period of 2023.
The sector in Q3 contributed 8.59 per cent and 8.42 per cent to the GDP in 2022 and 2021 respectively.
Analysts at FBNQuest Capital Research said in a note on Tuesday that the sector’s progress has been
constrained by multiple macro-headwinds, including the adverse impact of high inflation on household
wallets and operating costs, high-interest environment, and naira volatility.
“The sector posted another sluggish growth,” the Analysts said, noting that several multinational
companies have exited the Nigerian market due to the tough business environment.
Chairman of the Manufacturers Association of Nigeria Export Promotion Group (MANEG), Odiri
Erewa-Meggison,said that the potential consequences of the decline to the economy are numerous, ranging from unemployment, loss of revenue to the government in terms of taxes, social vices from the unemployed youths, increased crime rate, and increase in poverty between the rich and the poor or vulnerable.
Meggison said the ways to mitigate these consequences to boost the sector’s contribution to the GDP are if the necessary interventions are put in place by the federal government.
“These include; lowering the cost of borrowing and energy, curbing the problems of insecurity, providing the infrastructure and stabilising the exchange rate,” she said.
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