The Manufacturers Association of Nigeria, MAN, has challenged government on the state of infrastructure and unreliable power supply as critical to improving and sustaining gains especially made in the Gross Domestic Product, GDP, growth.
The Association in reaction to the data released by the National Bureau of Statistics, NBS, which revealed GDP growth of 2.27 per cent in 2019 when compared with the 1.91 per cent of 2018.
President of the MAN, Mansur Ahmed in the reaction, cautioned that though in specific terms the 4th 2019 GDP growth was positive, progressive, impressive but still largely below the desirable for a large economy like Nigeria.
“It is been positive stems from the fact that it moved a little farther from the negative region. Progressive because the nominal figure is trending upward at an increasing rate. The Real GDP growth rate is impressive in view of the fact that the 4th quarter record represents the highest quarterly growth performance since the 2016, but
Largely below the desirable because the 2.55 per cent growth is still below the population growth rate of 2.6 per cent” he said.
According to him, Implication of the full year figure: it is also gratifying that the full year figure of the real GDP of 2.27 per cent in 2019 when compared with the 1.91 per cent of 2018 undoubtedly revealed a promising but cautious trajectory of improving economic performance. This is encouraging, especially because it obviously surpassed the 2.1 per cent projections of the IMF apparently due to the usual heavy transactional seasonality activities.
The president however doubted that this would be sustained in the coming quarters because of the prevailing unfriendly operating environment.
He stated that the doubt would be overcome if Government ensures that its Ease of Doing Business reforms translates to reduction in the cost of doing business thereby resulting in a real GDP growth that may again surpass the 2.0 per cent projection for 2020.
He said, “In broad terms: the 4th quarter GDP growth evidently signifies hope rising, a sign of greater things to come, if and only if Government continue to sustain the ongoing reforms and policy direction. It is however expedient to state that a cursory look at the reported GDP growth revealed that it was largely spurred by:
“The inspiring performance of non-oil sector of the economy which contributed 92.68 per cent in the 4th quarter 2019 as against the 90.23 per cent recorded in the preceding quarter of the same year; even though lower by 0.26 per cent when compared with the 92.94 per cent of the 4th quarter 2018, Impressive growth in non-oil sector triggered by the increased activities in Information and Communication (Telecommunications), Upswing in the intensity of financial and policy support to the Agriculture sector, which spurred significant increase in Crop Production, Ongoing reforms and improved supervision of the Financial and Insurance Services sectors,
The renewed commitment of Government to support the Manufacturing sector, reduce import of finished products, improve patronage and increase local sourcing of raw materials, and The high-level production and transactional activities associated with the last quarter of every year coupled with the festive seasonality.”
He said that what government is expected to do to facilitate steady economic growth: in the light of the forthcoming AfCFTA, is to encourage the real sector through provision of basic infrastructure, especially electricity; allow manufacturers access to forex for importation of raw materials items that are not available locally; improved patronage of made in Nigeria products, provision of production driven incentives; elimination of incidences of multiplicity taxes, levies/fees and provision of an environment friendly to manufacturing.
From the Manufacturers perspective, Mansur said, “The statistical narrative of manufacturing growth as reported by NBS showed that the sector sustained positive but meagre growth of 0.14 per cent when you compare the reported 1.24 per cent growth in the 4th quarter of year 2019 with the 1.1 per cent recorded in the 3rd quarter of the same year.
“Manufacturing contribution to GDP rather remained stagnant at 8.74 per cent in the 4th quarter of 2019 as recorded in the 3rd quarter, a figure that is slightly below the 8.86 per cent recorded in the 4th quarter of 2018.”
This development he added clearly depicts that the manufacturing is still struggling, adding, “This is not too good for an economy that will soon be exposed to the vagaries of the AfCFTA that would commence effectively July 2020. It also reemphasizes the need for Government to consciously continue to address the perennial issues hindering optimum performance of real sector of the economy to guarantee improved performance and sustained growth.”