Nigeria has an ambitious target of raising the share of manufacturing to a whooping 20% of GDP according to Niyi Adebayo, the federal minister for industry, trade and investment.
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He told a virtual event on 30 March that the sector’s size should reach 20% share in GDP by 2023.
In this report analysts at FBN Quest say this would mark an impressive step up from the 12.8% attained at current prices in 2020.
Adebayo also told the event, co-chaired by the Nigerian Economic Summit Group (NESG), that his ministry will work out strategic plans for three segments (clothing and textiles, oil palm and auto assembly) in place by end-year.
Alongside the strategy, the government offers selective incentives (such as those offered by the special economic zones) and funding (including its NGN75bn package of support for MSMEs to counter the COVID-19 virus).
Recall that the Central bank approved a more substantial NGN1trn programme of credit interventions for the sector for the same purpose, of which NGN800bn had been disbursed by mid-March.
· The minister highlighted a number of areas where manufacturing needed to raise its game: these included marketing, brand strength, research and development. Others would add training and quality control.
· Manufacturing in Nigeria, as elsewhere, had a very difficult 2020, contracting by -8.8% y/y in Q2 due to the lockdown and by -2.8% over the full year.
· Performance did improve in H2. The CBN’s index of manufacturing production rose by 1.5% q/q in Q4 to 181.1 (2010=100). The national accounts show more rapid growth of 5.6% for the sector in the same quarter, led by 18.6% for textiles, apparel and footwear.
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