The Manufacturers Association of Nigeria (MAN) has reviewed the country’s manufacturing performance for the second half of 2024.
By Rukayat Moisemhe
The Manufacturers Association of Nigeria (MAN) has reviewed the country’s manufacturing performance for the second half of 2024.
Mr Segun Ajayi-Kadir, Director-General, MAN, made this known on Monday in Lagos in a report titled ” MAN Economic Review- Second Half 2024″.
He said the focus manufacturing indicators included capacity utilisation, production value, inventory, local raw materials utilisation levels, investment, expenditure on alternative energy sources among others.
Ajayi-Kadir noted that capacity utilisation of the manufacturing sector improved marginally to 57.0 per cent in 2024, up from 55.1 per cent in 2023.
A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.
He revealed that the sector’s real manufacturing output increased modestly by 1.7 per cent year-on-year to N7.78 trillion.
According to him, the development is buoyed by increased activity in motor vehicles and miscellaneous assembly, non-metallic mineral products, and electrical and electronics.
He, however, noted a half-on-half decline of 3.1 per cent in real production reflected rising costs and weak consumer demand.
“Nominal manufacturing output rose sharply by 34.9 per cent to N33.43 trillion, primarily due to inflationary pressures and rising domestic prices,” he said.
The MAN D-G said the manufacturing sector’s local raw material sourcing increased to 57.1 per cent in 2024, up from 52.0 per cent in 2023.
This shift, he stated, was largely driven by foreign exchange scarcity, high import costs, and government incentives promoting local content.
Ajayi-Kadir declared improvements observed in wood and wood products, textiles, apparel and footwear, and chemical and pharmaceuticals.
He said the electrical and electronics sector continued to lag due to dependency on imported components.
On the downside, the manufacturing expert noted that inventory of unsold finished goods surged by 87.5 per cent to N2.14 trillion in 2024.
He attributed the drive to weakened consumer demand, escalating production costs, and declining purchasing power.
He, however, said that a half-on-half decrease of 27.9 per cent in H2 2024 suggested improved clearance efforts and price adjustments.
He added that the country’s real manufacturing investment fell by 35.3 per cent year-on-year to N658.81 billion in 2024, reflecting economic uncertainty and reduced expansion plans.
“However, H2 2024 witnessed a 19.4 per cent increase compared to H1 2024, as manufacturers cautiously resumed capital expenditures.
“The employment situation in Nigeria’s manufacturing sector remained relatively stable in 2024, with 34,769 jobs added, a 1.8 per cent increase from 34,163 jobs in 2023.
“However, the number of employees leaving manufacturing companies also increased from 17,364 in 2023 to 17,949 in 2024, indicating ongoing labour mobility due to economic uncertainties, skill migration, and company restructuring,” he said.
Ajayi-Kadir said that electricity supply situation for industries improved in 2024, with the average daily supply increasing to 13.3 hours per day, up from 10.6 hours in 2023.
He stated that on a half-on-half basis, electricity supply rose from 11.4 hours per day in H1 2024 to 15.2 hours in H2 2024.
The MAN D-G, however, noted that electricity tariffs surged by over 200 per cent for Band A consumers, significantly increasing manufacturing costs.
“In response to unreliable grid power and increases in prices of diesel and fuel manufacturers’ total expenditure on alternative energy sources surged to N1.11 trillion, a 42.3 per cent increase from N781.68 billion in 2023.
“On a half-on-half basis, manufacturers spent N404.80 billion in H1 2024, which increased by 75.0 per cent to N708.07 billion in H2 2024,” he said.
Ajayi-Kadir added that rising interest rates posed a major financial burden, with commercial bank lending rates to manufacturers surging to 35.5 per cent in 2024 from 28.06 per cent in 2023.
“Consequently, manufacturers’ finance costs totalled N1.3 trillion, constraining investment and expansion plans,” he said. (NAN) (www.nannews.ng)
