Manufacturing Sector Shows Slight Year-on-Year Decline of 56.4% in H1 2024 -MAN
By Azeez Disu
The Manufacturers Association of Nigeria (MAN) has revealed that the country’s manufacturing sector showed a slight year-on-year decline from 56.5 percent in H1 2023 to 56.4 percent in H1 2024.
This is contained in a recent study conducted by MAN tagged “MAN Economic Review H1”.The report disclosed that forex scarcity, high operational costs, and unreliable electricity supply hindered the growth of the manufacturing sector during the period.
“Manufacturing sector showed a slight year-on-year decline to 56.4 percent in H1 2024, from 56.5 percent in H1 2023. However, there was a 2.8 percentage point increase compared to H2 2023, reflecting some recovery. The sector faced significant challenges, including high energy costs due to a 200 percent increase in electricity tariffs, forex scarcity, and declining consumer demand. These factors collectively resulted in elevated operational costs and a difficult business environment for manufacturers.”
The report underscores the urgent need for Nigeria to implement decisive and coherent economic reforms to address these challenges. Key areas of focus include enhancing policy consistency, improving the business environment, and fostering economic diversification.
The report also revealed that about 2,606 jobs were created during the period, which represents a 29.99 percent reduction from H2 2023.
“The employment generation capacity of the manufacturing sector continued to decline, with only 2,606 jobs created in H1 2024, a 29.99 percent reduction from H2 2023.”
Also, with the increase in electricity tariffs by over 200 percent, manufacturers turned to alternative power sources, spending N238.31 billion during the period.
“The cost of providing alternative power continued to rise, with manufacturers spending N238.31 billion on alternative energy sources in H1 2024, a 7.69 percent increase from H2 2023. The surge in costs was driven by higher prices for diesel, gas, and other energy sources, as well as the need for manufacturers to invest in self-energy generation due to unreliable power supply from the national grid,” it stated.