Manufacturers predict factory shutdowns as GDP growth slows

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Lagos, Dec.1, 2022 – The Manufacturers Association of Nigeria (MAN) today said the negative growth of the sector’s Gross Domestic Product might discourage potential investors from investing in the sector.

The Nigerian Bureau of Statistics (NBS) 2022 third quarter GDP report recently released said the sectors’ GDP declined further to 8.59 per cent from 8.96 per cent in the second quarter of 2022.

MAN reacted to the NBS report by issuing its own position paper where it said the GDP statistics would send unfavorable signals to potential investors in the sector.

It said the current GDP rate would usher in negative investors’ sentiments and pessimism against the provision of critical raw materials, technology and technical know-how required to promote the industry.

In the third quarter GDP report by NBS, the manufacturing sector accounted for 8.59 per cent of real GDP. This was marginally lower than the 8.96 per cent recorded in the same quarter of 2021 and 8.6 percent reported in the preceding quarter of 2022.

“The GDP growth slowdown will most likely result in a higher unemployment rate. Coupled with a high inflation rate, the economy is likely to face higher misery index that worsens the poverty level and further shifts consumers away from elastic manufactured goods.

“This will eventually result in a drastic reduction of patronage and lower sales turnover.

“The slag in the diversification drive implies further dependence on imported raw material and machinery.

“Hence, the forex crisis bedeviling the sector is not likely to be resolved anytime soon,” the manufacturer said.

They said they feared that high diesel cost and foreign exchange crisis would further lead to factory shutdowns and higher unemployment in the country. (GBN)

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