Manufacturing investment jumps 99% to N330bn

Investment made by members of the Manufacturers Association of Nigeria (MAN) between January and June 2017 rose to N329.94 billion, from N165.61 billion recorded in the corresponding period of 2016.

This signifies a N164.33 billion or 99.2 percent jump over the period, which is a significant number.

However, when compared with the second half of 2016, the number becomes a decrease of N119.65 billion or  26.7 percent from N448.94 billion recorded in the preceding half.

MAN documents indicate that asset under construction ranked highest within the period, with investments worth N188.04 billion. This is a departure from the past when plant and machinery often ranked highest.

Investment in plant and machinery came second at N112.88 billion, followed by land and building, which recorded N17.58 billion worth of investments.

Fourth, were cars and other vehicles upon which N8.72 billion was spent. Manufacturers pumped N2.07 billion into furniture and equipment within the period under review.

Food beverage & tobacco group topped the chart in terms of sectoral group investment. The sector pumped N91. 07 billion,  representing 27.66 percent of total manufacturing investment in the period under review.

This was followed by  the chemical & pharmaceutical group, which invested a total of N89.19 billion, representing 27.1 percent of the total.

Next was the non-metallic mineral products group (cement, glass and ceramics manufacturers) who invested N61.2 billion, representing 18.6 percent of the total.

In terms of industrial zones,  Apapa topped the chart. A total investments valued at N108.87 billion, indicating a 33.1 percent share of total, were invested by Apapa.

Ogun zone was second, with 28.4 percent  of total investments. Investments to Ogun were estimated at N93.76 billion. Ikeja came third with total investments worth N67.27 billion, representing 20.4 percent. Investments surged in Edo/Delta zone in the review period to the tune of N18.26 billion, just as Rivers zone attracted investment worth N20.81 billion in the period. Similarly, Kano Sharada/Challawa enjoyed investment worth N10.63 billion in the period under review.

Manufacturers who made investments within the period were Dangote Group, Flour Mills of Nigeria, FrieslandCampina WAMCO, and Standard Metallurgical Company Limited (SMC), among others.

MAN says investors need a conducive environment, which includes not more than five percent interest rate on credit, efficient infrastructure, patronage, export incentives and foreign exchange, to operate.

“The new resuscitated Export Expansion Grant (EEG) by the Federal Government should be given priority attention in implementation so as to quickly galvanise non-oil sector activities in the economy and improve the sector’s forex earnings,” MAN says.

“Nigerian manufacturers, through the EEG can take full advantage of the ETLS protocol to expand trade within the ECOWAS region and earn more forex.  This will also help diversify the export base of the economy away from oil.

“There is a need for government to continue to support the resource-based industrialisation and backward integration in the country through appropriate incentives and funding support to investors,” MAN adds.