The Manufactures Association of Nigeria (MAN) has disclosed that high cost of borrowing remained a core challenge of the manufacturing sector in the second half of 2019.
In its economic review for the second half of 2019, released Friday, MAN said that interest rate charged to manufacturers stood at 20 per cent, 1.4 percentage point lower than 21.1 per cent recorded in the same half of 2018 and lower by 2.25 percentage point when compared with 22.5 per cent recorded in the preceding half.
Despite the challenges, the report noted that at the end of the second half of 2019, an estimated 1,646,640 historical cumulative jobs were created in the manufacturing sector following data generated from various surveys conducted by MAN over time.
According to MAN, a total of 10,735 new manufacturing jobs were created in the second half of 2019, representing an increase of 1852 jobs when compared with 8,883 jobs of the same half of 2018. It however fell by 1,259 jobs compared with 11,994 jobs created in the preceding half respectively.
MAN however, said that a cross sectoral group observation shows food beverage and Tobacco accounted for most of the jobs created in the manufacturing sector with a total of 2,248 jobs; Domestic/Industrial Plastic & rubber 1,876 jobs; Textile Apparel & Footwear with 1,228 jobs; Non-Metallic Products 1,210 jobs and the Chemical & Pharmaceutical group recorded 1,164 jobs in the period under review.
In the period under review, MAN said a total number of 1,308 jobs were lost in the sector, representing a decrease of 1,989 job losses when compared with 3,297 jobs recorded in the preceding half.
On electricity supply to the sector, the Association said recent times, particularly with the privatization of the power sector, more attention has been given to electricity supply to the industry leading to marginal improvement in the country in terms of hourly supply and number of outage per day.
“Since the first half of 2018, electricity supply from the distribution companies to the sector has stabilized at 10 hours per on the average just as power outage stabilized at 3 times daily since these periods.
“Resulting from the marginal improvement in electricity supply to the sector, expenditure on alternative energy in the second half of 2019 declined to N34.70 billion from N49.92 billion recorded in the second half of 2018 but increased from N32.68 billion in the preceding half,” MAN said.
While giving the unsold inventory of locally manufactured goods in the period under review, MAN said unsold finished manufactured goods dropped marginally in the sector to at N202.16 billion, down by N23.73 billion (10.5 per cent) when compared with N225.89 billion recorded in the corresponding half of 2018.
It however increased by N1.9 billion (0.9 per cent) when compared with N200.26 billion recorded in the first half of 2019. Inventory of unsold finished goods in the sector totaled N402.42 billion in 2019 and N375.42 billion in 2018.
The development can be attributed to the closure of land borders of the country within the Economic Community of West African States (ECOWAS) regions which made Nigerians resulting to the purchase more of locally manufactured goods in the period.