Connect with us

Business

Manufacturing Contribute N6.16bn to GDP

Published

on

SABMiller Nigeria

The contribution of the manufacturing sector to the nation’s Gross Domestic Product rose to N6.616bn in the third quarter of last year, statistics from the National Bureau of Statistics indicated.

An analysis of the nine month revenue showed that the sector added N2.141bn to the economy in the first quarter; N2.125bn in the second quarter; and N2.35bn in the third quarter.

The figures also showed that the manufacturing sector surpassed the oil and gas industry by N1.93bn during the nine month period.

For instance, while the report, which was obtained on Friday, indicated that the manufacturing sector contributed N6.616bn in the months under review, the oil and gas added N4.677bn to the economy.

However, this is in contrast with the output of the oil and gas industry in 2014, which added N7.574bn, an amount that was N1.093bn higher than the contribution of the manufacturing sector for that year.

The manufacturing activities captured in the data are the oil refinery, cement, food, beverage and tobacco; textile, apparel and footwear; wood and wood products; pulp, paper and paper products; as well as chemical and pharmaceutical products.

Others are the non-metallic products; plastic and rubber products; electrical and electronics; basic metal, iron and steel; motor vehicles and assembly among others.

But the major revenue earners for the sector were given as food, beverage and tobacco, which contributed N3.15bn during the first three quarters of 2015.

It was reported that the exploration of petroleum and natural gas was becoming unprofitable due by the declining price of crude oil in the international market, which was almost equal to the cost of production.

Since the gradual fall in the price of crude oil in the international market from $114 in June 2014 to around $29 per barrel currently, the revenue generation ability of the industry has been in jeopardy.

Despite this gap between the two sectors, the organised private sector lamented that the 2015 financial year was one of the most challenging as difficulties in the business environment. Experts listed some of the problems as insecurity in parts of the country, weak infrastructure, foreign exchange restrictions, funding constraints, policy inconsistency and the quality of regulatory institutions.

The Lagos Chamber of Commerce and Industry said that the sector lost about N1.46tn in stalled business activities in the fast moving consumer goods, steel, furniture, pharmaceuticals and manufacturing sectors due to forex shortages.

The Manufacturers Association of Nigeria also identified the high cost of credit, poor power supply, high cost of alternative energy and non-availability of local input material as major challenges to the growth of the sector.

It stated, “The average cost of borrowing charged to manufacturers during the period was high and at double digit, which is discouraging to further investment or re-tooling in the manufacturing activities.”

The Director-General, Nigeria Employers’ Consultative Association, Mr. Olusegun Oshinowo, urged the government to give more attention to refining the petroleum products to improve the performance of the manufacturing sector.

In spite of the poor state of the economy, he said that government should not abandon any of its business-enhancing policies.

“For example, we used to have backward integration programme in Nigeria. The purpose of which is to encourage industries to source raw material from the economy, but the government has abandoned that policy and everyone is importing. Irrespective of the state of the economy, you must be clear about the quality of your policy, the outcome of your policy and stay consistent to your policy.

“The local content law in the oil and gas has positive impact. If in the same vein the government had come up with a policy that will promote forward integration in the oil and gas, the output from that sector and its contribution to the GDP would have been significant. Years back, if we had embraced a policy of refining our crude oil, it would have expanded and created more employment than what we have now. It would have saved foreign exchange and earned more for us.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Company News

Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

Published

on

Guinness - Investors King

Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

Continue Reading

Business

Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

Published

on

Private employers

As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

Continue Reading

Business

Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

Published

on

Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending