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.”
Union Bank Announces the Appointment of Aisha Abubakar as Independent Non-Executive Director
Union Bank of Nigeria Plc (“Union Bank”) has announced a change to the membership of its Board of Directors with the appointment of Ms. Aisha Abubakar as an Independent Non-Executive Director effective 9th September 2021, following the approval of the Central Bank of Nigeria (CBN).
Ms. Abubakar joins the Board of Union Bank following her tenure as Nigeria’s Honourable Minister for Women Affairs and Social Development from 2018 to 2019. Prior to this, she also served as the Honourable Minister of State for Industry, Trade and Investment between 2015 and 2018. At the start of her career, Ms. Abubakar worked at Continental Merchant Bank Ltd., African Development Bank and African International Bank.
She is an accomplished public sector administrator with over three decades of professional experience in Public Service and Pension Administration, Investment Banking, SME Finance/Rural Enterprise Development and Micro-Credit Administration.
Ms. Abubakar is a Fellow of the International Professional Managers Association (IPMA-UK), and the President of the International Experts Consultants (IEC-UK).
Commenting on the addition to the Board, Mrs. Beatrice Hamza Bassey, Union Bank’s Board Chair said: “On behalf of the Board of Directors, I welcome Ms. Aisha Abubakar to the Board. She brings many years of robust experience which will be invaluable in supporting our efforts to steer the Bank forward and deliver on our strategic objectives.”
Also commenting, Chief Executive Officer, Mr. Emeka Okonkwo said: “I am pleased to welcome our new Independent Non-Executive Director, Ms. Aisha Abubakar to the Board. We look forward to drawing from her wealth of experience and fresh perspectives as we continue to execute our vision to be Nigeria’s most reliable and trusted partner.”
AfDB Approves $50M Trade Finance Deal with Standard Chartered Bank
The African Development Bank Group has approved a $50m Trade Finance Unfunded Risk Participation Agreement (RPA) for StandardChartered Bank.
This was contained in a statement titled ‘African Development Bank approves a $50m Multinational Trade Finance Risk Participation Agreement facility for Standard Chartered Bank’ published on the bank’s website on Wednesday.
The statement said, “The board of directors of the African Development Bank Group has approved a $50m Trade Finance Unfunded Risk Participation Agreement facility between the African Development Bank and Standard Chartered Bank.”
The essence of this agreement is to promote intra-Africa trade, ensure regional integration and lessen the trade finance gap in Africa.
“The agreement is expected to boost intra-Africa trade, promote regional integration, and contribute to the reduction of the trade finance gap in Africa, in line with implementation aspirations of the African Continental Free Trade Area,”
The bank’s Director for Financial Sector Development, Stefan Nalletamby, stated that “We are excited about finalising this facility with Standard Chartered Bank as it offers us the flexibility to use our strong AAA-rated risk-bearing capacity to increase access to trade finance and boost intra/extra-African trade on the continent, in support of the AfCFTA.
“This partnership is expected to catalyze more than $600m in value of trade finance transactions across multi-sectors such as agriculture, manufacturing and energy over the next three years.”
Director-General of the bank’s Southern Africa region, Leila Mokadem, was quoted to have said, “The advent of COVID-19, coupled with stringent regulatory/capital requirements and Know Your Customer compliance enforcement, has seen many global banks reduce their correspondent banking relationships in Africa, while some are exiting the market altogether.
“There is, therefore, an urgent need for financing to reenergise Africa’s trade, which requires more participation of institutions like the African Development Bank.”
The parties in the agreement are expected to share the default risk on a portfolio of eligible trade transactions originated by African Issuing Banks and indemnified by Standard Chartered Bank.
Beneficiaries of this facility are issuing banks in Africa with the ability to grow their trade finance business has been constrained by inadequate trade confirmation lines from international banks.
Other beneficiaries are small and medium enterprises (SMEs) and domestic firms which rely on these issuing banks to fulfill their trade finance commitments.
The RPA facility is aligned with the AfDB’s High 5 priority goals which are: light up and power Africa, feed Africa, industrialize Africa, integrate Africa, and improve the quality of life for the people of Africa.
Standard Chartered Launches Flexible ‘Smart Business Loan’ Product To Support SMEs
Standard Chartered on Wednesday launched its Smart Business Loan (SBL) product to support Small and Medium Scale Enterprise (SMEs) in Nigeria.
David Idoru, Head of Consumer, Private and Business Banking, of the bank in Nigeria, said in a statement in Lagos that SBL was an unsecured installment/term loan available to SME clients within key target sectors.
“Qualified SMEs would be able to access up to N20million loan, without providing tangible security/collateral to purchase asset, finance business expansion and other capital expenditure needs.
“This loan was designed to help SMEs meet their short to medium-term needs.
“As a Bank, our purpose is to drive commerce and prosperity in the locations we operate in. This is done through offering cash, lending, trade and wealth management solutions that specifically drive economic growth,” he said.
Idoru said that the bank was constantly looking for ways to ensure SMEs get access to the needed support to enable their businesses to thrive, adding that prior to the product launch, clients were required to provide full collateral cover to access loans from the bank, but SBL had been designed to provide the necessary flexibility to the clients.
“It is accessible to new and existing clients of the Bank with no waiting period, including small and medium scale organisations, who can access up to N20million in loans without collateral for a maximum tenure of two years,” he said.
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