CBN, manufacturers differ on real sector growth rate in Q2 2017

Manufacturers are yet to accept the Central Bank of Nigeria’s (CBN) latest data projecting the real sector as having witnessed four per cent growth for three consecutive months, beginning with March through May 2017.

The apex bank had in its report on the performance of the economy, as it affects the manufacturing sector in the second quarter stated that the growth rate was achieved by the manufacturers due to improved means including importing needed raw materials and other factors.

The report stated that the Purchasing Manager’s Index (PMI) which measures the size of the nation’s manufacturing sector, rose to 52.9 point-index at the end of June, 2017 and is expected to improve further in the next quarter.

According to the statistics, the increase in performance of the sector was much noticed in the month of May, with a record valued improvement of 52.5 per cent.

However, a cross section of the operators in the sector said, though there were some relative improvement in some areas, including scarcity of dollars in the past two to three months of the year under reference, challenges have continued to confront the sector.

The Chairman of A-Z Aluminium company Nigerian Limited, Chief Rufus Okolanwan, said until the purchasing power of the consumer is enhanced, drawing conclusion, which creates impression of growth in the sector is hasty.

“What sense does it make for manufactured goods to be lying in the warehouse because inflation is making it impossible for buyers to go for them, whereas the authorities would come up with statistics indicating growth in PMI?

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“But the authorities are not saying anything on the high interest rate regime, which is still debarring manufacturers from expanding their production lines.

“No economy that discourages the real sector from having access to loan facilities witnesses actual growth”, the chairman said.

Supporting this view, Mr.Clement Anyahie, a director with the Manufacturing Association of Nigeria (MAN) said until there is a single digit in both the interest rate and inflation rate, the expected growth in the economy would not be schueved in recorded time.

To Anyahie, governmnet has listened to MAN on the aspect of making dollar accessible to the manufacturers, but the question of reducing multiple taxation in the system is still an issue that has not yet been addressed.

But the CBN is not ready to be drawn into any issue outside what its data is saying on the performance of the economy.

For instance, the bank maintained that the evidence that Nigerian economy is on its path of growth is the fact that 12 of the 16 sub-sectors had also reported improved performance in the period under review.

Some of the sub-sectors include: computer & electronic products; paper products; plastics & rubber products.

Others are primary metal, transportation equipment, petroleum & coal products, appliances & components, textile, apparel, leather & footwear, furniture & related products.

Electrical equipment, food, beverage & tobacco products and fabricated metal products also made the list.

The report further stated: “Composite PMI, above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, while below 50 points indicates that it is generally declining.”

 

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