Nigerian economy still far from being diversified…..MAN

COMFORT EKELEME

Despite the 94.34 per cent contribution of the non-oil sector, the Manufactures Association of Nigeria (MAN) said the Nigerian economy is still far from being diversified.
MAN position was hinged on the fact that the oil sector currently accounts for about 80 per cent of the country’s export earnings which is less balanced in comparison with South Africa’s top four export earners: mineral products (25 per cent), precious metal (17per cent), vehicles and aircraft vessels (12per cent) and steel products (12per cent).
Director General of MAN, Segun Ajayi-Kadri in a statement on the position of MAN on the Gross Domestic Product (GDP) report for the third quarter of 2022, maintained that the continuous downturn of the nation’s economy has further validated the urgent need to release an updated unemployment rate that corresponds with the current economic situation.
He said the growth slowdown will result in higher unemployment that can diminish the taxable capacity of individuals and in turn worsen the debt-to-GDP and debt service-to-revenue ratios.
Speaking further he said, “Hence, is projected that economic growth will decline further in subsequent quarters.
“Nigeria’s credit rating will be further affected as high economic growth is one of the indictors of sustainable debt. In recent time, Moody’s and Fitch had downgraded the country’s credit rating.
“It is expected that the credit rating will further worsen and significantly limit the country’s chances in sourcing for external development funds. This will inevitably slow down the pace of developmental projects,” he said.
He however, called on the federal government to tackle insecurity and smuggling by upscaling capacity building and providing adequate security equipment and technology for surveillance and intelligence gathering.
Director General of MAN, Segun Ajayi-Kadri while stating the position of the Association on the Gross Domestic Product (GDP) report for the third quarter of 2022, said the Nigerian economy is still highly vulnerable to oil price shock.
Recent report by the National Bureau of Statistics (NBS) revealed that year-on-year real GDP growth of the Nigerian economy stood at 2.25 per cent in the third quarter of 2022.
At a real GDP value of N18.96 trillion, the latest performance signifies a shortfall of 1.78 per cent point from 4.03 per cent real GDP growth recorded in the third quarter of the previous year.
The MAN DG called on the government to continue to involve all stakeholders to play a vital role in supporting security along the oil infrastructure while also ensuring they are beneficiaries of the awarded surveillance contract.
According to him, there is need to deploy means to reduce unemployment and boost productivity of the manufacturing by encouraging local sourcing of raw materials, improving infrastructural developments.
Ajayi Kadri also stressed the need to jettison the failing hard peg policy and establish a clear and transparent market framework to guide the interventions of the Central Bank of Nigeria (CBN) in the forex market.
He also stressed the need to synergistically align monetary and fiscal policies while also curbing fiscal deficits by the gradual removal of fuel subsidy backed with appropriate palliatives for the poor.
Also he noted that the federal government should tackle flood disaster adopting erosion control mechanisms, early warning and emergency services as well as flood risk assessment and ecological funds, upscale electricity generation and build super grids that are regionalized to avoid continuous national system collapse and ensure a more robust transmission infrastructure.
The report also indicates 1.29 per cent point decline from the value of economic activities recorded in the second quarter of 2022.
The last published figure was in December 2020 at 33.33. Analysts had projected that the country’s rate of unemployment is well above the 40per cent mark.
Data provided by the report shows that Food, Beverage & Tobacco (48.8per cent), Textile, Apparels and Footwear (18.6per cent) and Cement (11.72per cent) were the top three contributors of the manufacturing sector in the third quarter of 2022.
On the other hand, Chemical and Pharmaceutical Products, Wood & Wood Product and Basic Metal Iron & Steel were the top three improved sub-sectors in the period under review.
However, the manufacturing sector accounted for 8.59 per cent of real GDP in the third quarter of 2022 which is marginally lower than the 8.96 per cent recorded in same quarter of 2021 and 8.6 per cent recorded in the preceding quarter of 2022.