Recent data from the National Bureau of Statistics (NBS) has shown that 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.
The sector’s contribution to the GDP in the third quarter of 2024 declined to 8.21% from 8.42% in the corresponding period of 2023.
The sector in Q3 contributed 8.59% and 8.42% to the GDP in 2022 and 2021 respectively.
Analysts at FBNQuest Capital Research said 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, warned of potential consequences of the decline to the economy, including 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.
