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NESG Urged FG To Develop Industrial Policy for Manufacturing Sector



The 2021 Macroeconomic Outlook report by the Nigerian Economic Summit Group (NESG) has urged the federal government to develop industrial policy and sectoral plans for priority areas as well as address the challenge of insecurity in the country.

The report disclosed that the manufacturing sector is one of the six sectors that have the potential to create jobs and reduce poverty.

The report also noted that for the sector to create jobs and reduce poverty, private investments would play a major role.

It further explained that from recent happenings, actual investments in manufacturing are realised when there is an intersection of market opportunities and government support. It maintained that Nigeria’s reliance on imports, its large market and the coming into effect of the African Continental Free Trade Area (AfCFTA) agreement present a huge opportunity for investment in the manufacturing sector, especially in agro-processing and light manufacturing.

Also, the report noted that Nigeria’s manufacturing sector faced several challenges even before the outbreak of the COVID-19 Pandemic.

It posited that prior to the pandemic, the sector had suffered mainly from the closure of land borders in September 2019, which reduced informal exports and indirectly affected several manufacturing outfits in Aba, Kano and Lagos.

The report stated that perennial problems of power supply, logistics bottlenecks, infrastructure deficits, limited access to credit, foreign exchange scarcity have continuously affected the sector’s performance over time.

It added: “The growth of the manufacturing sector has been stagnant (average growth of -0.6% from 2015 to 2019) while capacity utilisation has remained low.

“The manufacturing sector is made up of 13 subsectors, including oil refining; cement; food, beverage and tobacco; textile, apparel and footwear; wood and wood products; pulp, paper and paper products; chemical and pharmaceutical products; non-metallic products; plastic and rubber products; electrical and electronics; basic metal, iron and steel; motor vehicles and assembly and other manufacturing.”

According to the report: “The sector is dominated by informal players that are mostly micro, small, and medium enterprises.

“Manufacturing is Nigeria’s third-largest sector in terms of employment, after agriculture and trade, but the poor quality of infrastructure remains the longest standing problem of the sector in Nigeria and contributes to the high cost of production.

“Bad road networks and inadequate electricity supply also make it difficult for businesses to maximise returns and limit operations costs in the sector.

“However, Nigeria has numerous favourable conditions for investment, especially in its manufacturing sector.

“Some of these conditions include large arable land, strategic location in Africa and large market and opportunities presented by the AfCFTA.

“Developing Nigeria’s manufacturing sector is the solution to Nigeria’s foreign exchange problems as the sector has the potential to create jobs and lift millions of Nigerians out of poverty if the government addresses the current challenges.

“Already, there are several initiatives and interventions in the manufacturing sector, ranging from import restrictions to the establishment of 43 export processing zones which are currently at different stages of development, according to the Nigerian Export Processing Zones Authority.”

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



Petrol Importation -

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.

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




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.

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



power project

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.

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