Manufacturers in the country under the auspice of Manufacturers Association of Nigeria (MAN) have disclosed that Nigeria’s cumulative manufacturing investment stood at N3.79 trillion in 2016. This is according to a survey conducted by MAN and made available to EYES OF LAGOS in Lagos.
It indicated that in the second half of 2016, manufacturing investment increased to N448.94 billion from N309.33 billion recorded in the corresponding period of 2015, indicating N139.61 billion increases over the period. It also increased by N283.33 billion when compared with N165.61 billion recorded in the preceding period.
The association’s survey also indicated that manufacturing investment totaled N614.55 billion in 2016 as against N489.45 billion of 2015; depicting N125.1 billion increase over the period.
A breakdown of MAN’s findings showed that plant and machinery ranked highest with investment worth N189.84 billion; trailed by land and building worth N86.58 billion; assets under construction followed with investment worth N64.48 billion; motor vehicle was N58.05 billion; while furniture and equipment had investments worth N49.97 billion in the review period.
Besides, the sectoral group analysis showed that the highest proportion of total manufacturing investment in the period under review (38.0 per cent of N448.943 billion) went into the non-metallic mineral products group as investment in the sector surged to N170.81 billion from N1.15 billion of the corresponding periods of 2015; thereby indicating N169.66 billion increase over the period.
It also increased by N120.35 billion when compared with N50.46 billion of the preceding half. The survey also noted that investment in the sector totaled N221.27 billion in 2016 as against N18.82 billion total of 2015; translating to N202.45 billion increases over the period.
In addition, data generated from MAN survey also showed that 69.9 per cent of total manufacturing investment in the review period, which stood at N448.94 billion, went to Ogun; thus retaining the zone as the investment haven of the nation.
Breakdown revealed that investment in Ogun increased to N313.62 billion in the review period from N302.26 billion of the corresponding half of 2015; indicating N11.36 billion increase over the period. It also increased by N259.07 billion when compared with N54.55 billion recorded in the preceding half.
However, investment in the zones totaled N368.16 billion in 2016 as against N430.55 billion recorded in the 2015; depicting N62.39 billion decline over the period. Meanwhile, the association has also disclosed that its members suffered limited availability of borrowable funds and also high interest rate in the second half of 2016, which consequently affected their cost of goods produced in the country.
Particularly, a survey conducted by MAN showed that average cost of borrowing from the commercial banks increased to 23.3 per cent from 21.9 per cent recorded in the corresponding half of 2015; translating to 1.4 per centage point decline over the period.
In addition, it also declined by 1.9 per centage point when compared with 21.4 per cent recorded in the preceding half. According to the association, “high cost of borrowing was consistent across sectoral groups and industrial zones and was a major challenge to manufacturing in the period under review.”