May 27, 2022May 27, 2022

BUA, others push manufacturing output to N7tn

Posted By: Julian Daily Gist Editorial Team 0 Comment

New factories built by BUA Cement and African Glass Limited as well as five new paper mills that recycles wastepaper into carton drove up manufacturing output in Nigeria in the second half of last year, industry data have shown.

Manufacturing sector production output increased by almost 60 percent to N7.03 trillion in 2021 from N4.42 trillion in 2020, the Manufacturers Association of Nigeria (MAN) said in a new report on Thursday. It increased to N3.73 trillion in the second half of 2021 from N2.36 trillion in the same half of 2020.

MAN’s 2021 second-half economic review revealed that manufacturing investments soared by 83.2 percent in 2021 to N217.22 billion from 118.52 billion in 2020.

Capacity utilisation in the sector averaged 58.9 percent in 2021, up from 49.5 percent a year earlier.

The increase in manufacturing capacity utilisation and investments was attributed to the gradual recovery of business and economic activities as efforts were intensified to contain the COVID-19 pandemic.

“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 are the additional capacities as BUA Group introduced a cement factory in Sokoko and the new African Glass Limited factory that produced glass products,” it said.

The association, however, said manufacturing activities in the non-metallic minerals sector had been persistently low following the exclusion of some of the raw materials imported for glass production from the official foreign exchange window.

“The situation is worsened by the limited availability and high cost of prospecting for local development raw materials in the country. Capacity utilisation in the sector averaged 49.5 percent in 2021 as against 49.9 percent in 2020,” the manufacturers said.

A total of 16,110 jobs were created in the sector last year while 4,451 jobs were lost, according to the report.

“The net job created in the sector in 2021 stood at 11,659 while a net job loss in 2020 was 3,257. The trend thus shows that manufacturing jobs are also rebounding following the gradual return of economic activities in the sector after a year onslaught brought by COVID-19 pandemic,” MAN said.

Last year, Flour Mills of Nigeria announced its acquisition of an additional 5,200 hectares of land at Sunti which expanded the total land size of Sunti Golden Sugar Estates to 22,000 hectares.

Olam said its subsidiary Crown Flour Mill Limited launched a N300 million ($750,000) 10-year project to set up community seed enterprises for Nigerian farmers to increase their production of wheat.

Local sourcing of raw materials in the sector dipped to 52.4 percent in 2021 from 57.5 percent in 2020, according to the report.

“Since the full opening of the economy following the lockdown associated with COVID-19 pandemic, local raw materials and other manufacturing inputs have been relatively scarce and costly. This has also affected the output of the sector negatively,” MAN said.

It stressed the need to improve and reposition the sector back as the engine of growth.

According to the association, there is a need to maintain those policies and formulate others that will encourage investments, especially on the stability of exchange rate, development of local raw materials, and protection of lives and properties, among others.

“The manufacturing sector is very important in a growing economy but Nigeria’s manufacturing sector is currently struggling with a myriad of challenges. This data was for 2021 but since the beginning of this year, things have gotten worse; so there are fears that these improvements recorded may not be sustainable this year,” Jide Babatope, a Lagos-based analyst, said.

According to him, manufacturers are battling with a widening supply-demand gap, acute shortage of FX for transactions, continuous depreciation of the naira, and surging cost of production, among others.

He said except things improve going forward, manufacturers may not be able to maintain this kind of growth going forward.

MAN CEOs Confidence Index, which was recently released, declined to 53.9 points in the first quarter of 2022 from 55.4 points in the fourth quarter of 2021, as macroeconomic conditions and global crisis took a toll on the sector.

“Contributory factors to the decline in the index score for the first quarter of 2022 include eroding disposable income of consumers, the immediate impact of the Russian invasion of Ukraine as seen in the hike in price of diesel, wheat and other imported manufacturing inputs the persistent acute shortage of forex, insecurity, high interest rate, excessive drive for revenue by Government,” the association said.

Since Russia’s invasion of Ukraine in February, manufacturers in Africa’s largest economy have suffered production hiccups as the supply of raw materials was disrupted and the price of diesel, a major source of energy, surged by over 92 percent, causing a surge in the cost of production.

“Notwithstanding the improved performance of the manufacturing sector during the year, it is still far beyond its potential growth and contribution to national output due to an almost innumerable challenges confronting the sector,” MAN said.

The association urged the government to create plausible incentives for investment in the development of raw materials locally through the backward integration and resource-based industrialisation initiatives.

“Industrial policies in the country should be allowed to gestate with proper monitoring and evaluation rather than jettisoning or altering them frequently while the implementation of Executive Order 003 must be properly monitored to ensure compliance by MDAs in order to boost activities in the manufacturing sector,” it said.

Julian Daily Gist Editorial Team

Julian Daily Gist Editorial Team is the team responsible for researching, writing, editing, and publishing news and feature content on Julian Daily Gist. Our coverage includes Nigerian current affairs, lifestyle, entertainment, sports, health, business, and human-interest stories. We aim to provide readers with timely, accurate, and responsibly sourced information. The Julian Daily Gist Editorial Team researches, writes, edits, and publishes news and feature content covering Nigerian current affairs, entertainment, sports, health, business, lifestyle, and human-interest stories. We aim to provide accurate, timely, and responsibly sourced information and update our reports when credible new information becomes available. The Julian Daily Gist Editorial Team is responsible for researching, writing, editing, and publishing content across Julian Daily Gist. Our coverage includes Nigerian current affairs, politics, business, entertainment, sports, health, lifestyle, and human-interest stories. We aim to provide readers with timely, accurate, useful, and responsibly sourced information. Our team makes reasonable efforts to verify important information, identify sources, distinguish allegations from confirmed facts, and update reports when credible new information becomes available. We also believe in transparency and accountability. Readers can contact our editorial team to report factual errors, request corrections, or provide additional information relevant to a published story. Editorial focus: News, current affairs, lifestyle, entertainment, sports, health, business, and human-interest stories. Team BIo: The Julian Daily Gist Editorial Team is responsible for researching, writing, editing, and publishing content across Julian Daily Gist. Our coverage includes Nigerian current affairs, politics, business, entertainment, sports, health, lifestyle, and human-interest stories. We aim to provide readers with timely, accurate, useful, and responsibly sourced information. Our team makes reasonable efforts to verify important information, identify sources, distinguish allegations from confirmed facts, and update reports when credible new information becomes available. We also believe in transparency and accountability. Readers can contact our editorial team to report factual errors, request corrections, or provide additional information relevant to a published story. Editorial focus: News, current affairs, lifestyle, entertainment, sports, health, business, and human-interest stories. Editorial Policy: At Julian Daily Gist, our goal is to provide readers with timely, useful, accurate, and responsibly presented news and information. We cover Nigerian current affairs, politics, business, entertainment, sports, health, lifestyle, human-interest stories, and other topics of interest to our readers. 1. Accuracy and Verification We make reasonable efforts to ensure that information published on Julian Daily Gist is accurate and presented in its proper context. Before publishing a report, our editorial team makes reasonable efforts to: - Check information against credible sources. - Verify names, dates, locations, figures, and other important details. - Attribute information to the appropriate source. - Distinguish confirmed facts from allegations, claims, opinions, and speculation. - Update stories when credible new information becomes available. When information cannot be independently verified, we make this clear to readers rather than presenting it as established fact. 2. Sources We use a range of sources, including: - Official government statements. - Police and security agencies. - Courts and legal documents. - Government agencies. - Direct interviews and statements. - Reputable news organizations. - Publicly available records. - Verified social media accounts and statements. When an article relies substantially on information reported by another publication, we aim to clearly attribute the information to that source. We do not intentionally present another publication's reporting as our own. 3. Originality Julian Daily Gist aims to provide original editorial value. When we report information that has already been published elsewhere, we seek to add value through original writing, context, verification, analysis, additional information, or other useful material. We do not intentionally copy and republish articles from other websites without appropriate attribution and meaningful editorial contribution. 4. Allegations and Sensitive Claims When reporting allegations involving individuals or organizations, we make reasonable efforts to clearly identify allegations as allegations. We avoid presenting unproven accusations as established facts. Where relevant, we seek or include responses from the person, organization, or representative concerned. For criminal matters, we recognize that an allegation, arrest, charge, or accusation does not by itself establish guilt. 5. Headlines Our headlines are intended to accurately reflect the content of our articles. We aim to avoid deliberately misleading headlines, fabricated claims, or headlines that exaggerate facts simply to generate clicks. 6. Corrections and Updates We take corrections seriously. If we discover that an article contains a significant factual error, we may correct or update the article as appropriate. Readers who identify an error are encouraged to contact us with specific information supporting the correction. Where appropriate, significant corrections or updates may be noted within the article. 7. Editorial Independence Editorial decisions are made independently of advertisers, sponsors, commercial partners, and other external interests. Advertising or sponsorship does not automatically influence our editorial decisions or the opinions expressed by our writers. 8. Sponsored and Promotional Content Where Julian Daily Gist publishes sponsored, paid, or promotional content, we aim to clearly identify it as such. Sponsored content does not necessarily represent the independent editorial views of Julian Daily Gist. 9. Conflicts of Interest Our editorial team should avoid situations where personal, financial, or other interests could improperly influence reporting. Where a relevant conflict of interest exists, we aim to disclose it when appropriate. 10. Use of Images and Other Media We aim to use images, videos, graphics, and other media responsibly and with appropriate permission, licensing, attribution, or other lawful basis where required. We do not knowingly use copyrighted material in a manner that infringes the rights of its owner. If you believe that material published on Julian Daily Gist infringes your copyright, please contact us so that we can review the matter. 11. Artificial Intelligence We may use technology and artificial intelligence tools to assist with certain editorial tasks, such as research support, proofreading, formatting, transcription, or drafting assistance. However, AI-generated information is not treated as automatically accurate. Content remains subject to human review, editing, fact-checking, and editorial judgment before publication where appropriate. We do not intentionally publish fabricated information generated by AI. 12. Privacy and Personal Information We take reasonable care when handling personal information and avoid publishing unnecessary private information about individuals. Sensitive personal information is published only when there is a legitimate public-interest reason and where appropriate. Our handling of visitor information is explained in our Privacy Policy. 13. Opinion and Commentary Opinion articles and commentary represent the views expressed by the respective writer or contributor. Where appropriate, opinion content will be identified as commentary, analysis, or opinion so that readers can distinguish it from straightforward news reporting. 14. User-Generated Content Comments and other material submitted by readers may be moderated. We reserve the right to remove content that is unlawful, defamatory, abusive, discriminatory, misleading, threatening, spam-related, or otherwise inappropriate. User comments do not necessarily represent the views of Julian Daily Gist. 15. Our Commitment We are committed to improving the quality, accuracy, transparency, and usefulness of Julian Daily Gist. As our publication grows, we will continue reviewing our editorial practices and updating this policy when necessary. 16. Contact and Corrections If you have a correction, clarification, complaint, copyright concern, or question about our editorial practices, please contact us through our Contact Us page.