A group under the aegis of Manufacturers Association of Nigeria (MAN) has called on the federal government to establish a manufacturing development bank in the country in other to cater for the credit needs of the manufacturing sector especially.
AdvertisementAmong in their request are; FG to empower the Development Bank of Nigeria to fully commence operations, re-capitalize the Bank of Industry (BOI) to enable it meet up with the huge credit demand of the industrial sector, upscale access to the various development funds created by the CBN such as the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the N300 billion Real Sector Support Facility (RSSF) through relaxing stringent conditions that denies manufacturers access to these funding windows.
Association made this know in its second half economic review 2016 released recently
MAN lamented that the limited availability of borrowable funds and the attendant high interest rate was a major challenge to manufacturing in the period under review which shows that the average cost of borrowing from the Commercial Banks increased to 23.3 percent from 21.9 percent recorded in the corresponding half of 2015; thereby indicating 1.4 percentage point decline over the period. This high cost of borrowing was consistent across sectoral groups and industrial zones, according to the survey.
Manufacturers’ expenditure on alternative energy source in the period increased to N66.99 billion from N29.48 billion expended in the corresponding period of 2015; thus indicating N37.51 billion increases over the period. It also increased by N4.03 billion when compared with N62.96 billion recorded in the preceding half. Expenditure on alternative energy sourcing in the sector increased to N129.95 in 2016 from N58.82 billion recorded in 2015; thereby indicating N71.13 billion increases over the period due to the poor performance of electricity supply as daily supply was averaged 8 hours and outage 4 times.
Also “MAN disclosed that estimated 1.63 million historical cumulative jobs were created in the manufacturing sector based on the information gathered from the various surveys conducted by MAN over time.
The breakdown showed a total of 10,061 manufacturing jobs were created in the second half 2016 as against 9393 jobs created in the corresponding half of 2015; thus indicating an increase of 668 jobs over the period. While Food, Beverage and Tobacco sectoral group accounts for most of the jobs created in the manufacturing sector as it created 2947 jobs in the second half of 2016.
According to the “data generated from MAN survey shows that 69.9 percent of total manufacturing investment in the review period stood at N448.94 billion went to Ogun; thus retaining the zone as the investment haven of the nation. Investment in the Ogun increased to N313.62 billion in the review period from N302.26 billion of the corresponding half of 2015; thereby 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. Investment in the zones totaled N368.16 billion in 2016 as against N430.55 billion recorded in the 2015; thereby indicating N62.39 billion decline over the period.