The Chief Executive Officer, CEO, of the Center For The Promotion Of Public Enterprise, CPPE, Dr. Muda Yusuf, has called on the Federal Government to expedite action in the implementation of the Petroleum Industry Act, PIA, to provide a clear growth path for the oil and gas industry.
Reviewing the Q3, 2022 Gross Domestic Product, GDP report, which dipped to 2.25 per cent in the third quarter of 2022, from 3.54 per cent in the second quarter, Yusuf observed that the oil and gas sector, oil refining were among sectors that posted two consecutive quarters of negative GDP growth.
He said they are segments of the economy that are experiencing much deeper crisis of recovery and still experiencing recession.
He also mentioned textiles and railways as experiencing growth difficulties.
Yusuf, former Director General of the Lagos Chamber of Commerce and Industry, LCCI, said these sectors are plagued by challenges of insecurity, wrong policy choices, structural impediments, plunge in productivity and corruption.
He said Government should urgently accelerate efforts to ensure domestic refining of petroleum products and specifically carry out reforms which prioritize infrastructural development and transparency in the budgetary process.
According to the GDP report, there are sectors that suffered contractions which are sectors that posted negative GDP growth. These are also sectors that are victims of the diverse headwinds in the economy and they include: Crude oil and gas which contracted by 22.67 per cent, Oil refining contracted 44.7 per cent, Coal Mining – 43.5 per cent, Manufacturing Sector – 1.91 per cent.
Food and beverage sector which is one of the most shocking contracted by 4.05 per cent while the Textiles industry contracted by 3.98 per cent.
According to him. It is also worthy of note that the manufacturing sector as a whole contracted by 1.91 per cent , Electricity and Gas – 3.56 per cent while Plastics and Rubber Products – 3.92 per cent
He noted that a striking feature of the GDP Q3 report was the contraction of the manufacturing sector which shrunk by 1.91 per cent.
This is the first quarterly contraction of the manufacturing sector since 2020 when the economy slipped into recession, he said, adding, “Of greater concern was the slump in the food and beverage sector which contracted by 4.05 per cent.
This is the first contraction of the sector since the recession of the second quarter of 2020.
The food and beverage sector is the flagship of the Nigerian manufacturing sector. for several decades, it was the toast of investors in the stock market.
The sector contributed N2.2 trillion to GDP in the third quarter of 2022.
“This development is a reflection of a major setback for the Nigerian manufacturing sector which calls for an emergency response by the government. The plunge in the manufacturing sector performance has profound implications for food inflation, food security and employment. The food processing sector has the biggest impact on jobs because of the strong backward integration content and high multiplier effect in the agriculture value chain.” Yusuf added.