Economy

Manufacturing Sector Contracts in August Amid Growing Economic Uncertainties

Published

3 years ago

August 28, 2020

Economic Uncertainties Weigh on Manufacturing Sector in August

The Central Bank of Nigeria (CBN) on Thursday said the nation’s manufacturing sector contracted for fourth consecutive months in August.

The Manufacturing Purchasing Managers’ Index, which measures activities in the manufacturing sector, stood at 48.5 index points in the month of August. Below the 50 threshold that separates expansion from contraction.

According to the report, only 6 subsectors out of the 14 subsectors surveyed recorded expansion above 50 thresholds in the month under review. The subsectors are in the following order: nonmetallic mineral products; cement; plastics & rubber products; transportation equipment; chemical & pharmaceutical products and textile, apparel, leather & footwear.

While the remaining 8 subsectors contracted in the following order: printing & related support activities; electrical equipment; petroleum & coal products; primary metal; furniture & related products; paper products; food, beverage & tobacco products; and fabricated metal products.

Similarly, production in the manufacturing sector contracted at 49.2 points in the month of August as only 5 subsectors recorded expansion in production with 3 subsectors remaining unchanged from the previous. The remaining 6 subsectors posted contraction in production.

Again, demand in the sector remained weak as new orders stood at 49.2 points in the month under review. Suggesting that despite the low productivity and drop in output, demand remains generally weak.

“Six subsectors reported expansion in new orders, 2 subsectors maintained same level, while 6 recorded contraction in the review month,” the report noted.

Also, job creation in the manufacturing sector continues to drop at 44.6 points, reflecting the series of economic uncertainties brought about by the COVID-19 pandemic in recent months.

In the report, the CBN said “The employment level index for August 2020 stood at 44.6 points, indicating contraction in employment level for the fifth consecutive months. Of the 14 subsectors, 2 subsectors recorded expansion in employment level in the review month; 3 subsectors recorded same level of employment, while the remaining 9 subsectors recorded lower employment level in the review month.”

Up Next

FG Plans Support Fund for Private School teachers, Artisans

Don't Miss

Shinzo Abe Japanese Prime Minister Resigns, Ending Almost a Decade Policy, Abenomics

Samed Olukoya

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

Comments

Economy

Inflation and Forex Mismanagement Drive Petrol Truck Prices from N7M to N25M

Published

2 days ago

December 8, 2023

Investors King

The Chairman of the Independent Petroleum Marketers Association of Nigeria in the Satellite Depot branch, Akin Akinrinade, has raised an alarm over the rising cost of petrol trucks in Nigeria.

According to Akinrinade, the cost of a petrol truck has surged from N7 million in May to an astonishing N25 million at present, attributed to inflation induced by poorly managed foreign exchange rates.

Akinrinade pointed out that the forex mismanagement has significantly impacted the landing cost of premium motor spirit (PMS), commonly known as petrol, consequently leading to a surge in pump prices.

The unstable business environment, coupled with the astronomical rise in expenses, has created challenges for marketers in the downstream oil sector.

Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), highlighted in October 2023 that foreign exchange challenges have hindered private companies from importing petroleum products.

As a result, the NNPCL has become the exclusive importer of petrol.

The decision to limit private entities from importing fuel comes after President Bola Tinubu’s initiatives aimed at deregulating the fuel market.

Initially, the plan was to allow private companies to import fuel starting June 2023, aligning with efforts to balance the market after removing petrol subsidies.

The ripple effects of the soaring petrol costs are already evident, with commercial transporters increasing fares, and private car owners seeking fuel-saving alternatives.

As Christmas approaches, the surge in demand for interstate travel is expected to further elevate costs, posing financial challenges for many Nigerians amidst stagnant income levels.

Economy

Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption

Published

3 days ago

December 7, 2023

Investors King

The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.

The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.

The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.

The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.

This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.

Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.

The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.

Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.

Economy

Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion

Published

3 days ago

December 7, 2023

Investors King

The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.

Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.

During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.

He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.

Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.

The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.

Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.

The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.

The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.