In an apparent indication of the country’s lethargic progress toward industrialisation, the manufacturing sector contributed a pitiful 9% average contribution to GDP over three years, from 2019 to 2021.
This performance, which reflects the impact of the manufacturing sector’s numerous challenges, is 16.7 percentage points lower than the Agricultural sector’s average contribution of 25.7 percent for the three years.
According to available data from the National Bureau of Statistics (NBS), the manufacturing sector contributed N19.26 trillion to the GDP in real terms over a three-year period, while the agriculture sector contributed N55.05 trillion.
The total value of the nation’s economic activity during the time under consideration was N213.79 trillion.
Analysts opined that the huge gap between the GDP share of the Agriculture and Manufacturing sectors is an indication of a need for improvement in value addition in the production chain of the economy.
Infrastructural deficiencies are major constraints to the growth of Nigeria’s manufacturing sector, chief among which is power supply, with most firms relying on power generators to run seamless operations eventually adding to costs. The situation has been recently compounded with the escalation in the price of diesel, with other challenges including forex scarcity, difficult access to credit, and the rising cost of imported raw materials, amongst others.
Recall that Financial Vanguard last week Monday exclusively reported 40 percent increase in raw materials cost of seven companies that produce Fast Moving Consumers Goods Products, FMCGs.
A breakdown of the NBS data shows that the real contribution of the manufacturing sector to GDP in 2019 was N6.47 trillion; N6.29 trillion in 2020; and N6.50 trillion in 2021, representing 9.06 percent; 8.99 percent and 8.98 percent, respectively.
Within the same period however, the contribution of the Agriculture sector was N17.96 trillion in 2019; N18.35 trillion in 2020; and N18.74 trillion in 2021, representing 25.16 percent; 26.21 percent; and 25.89 percent, respectively.