Manufacturing job data show policy gaining traction

The job creation performance of Nigeria’s manufacturing sector in 2014, particularly in the third quarter of the year, shows that government policies are beginning to yield positive results.

It also tends to justify the call for sector-specific incentives and dwarfs South Africa’s job creation index in Q3 2014.

The most recent data released by the National Bureau of Statistics (NBS), Nigeria’s data manager, shows that a total of 54, 446 jobs were created in the manufacturing sector in Q3 2014. This shows a 388.83 percent increase from 11,138 jobs created in the second quarter of that year.

NBS data had earlier shown that only 11,088 jobs were created in the first quarter of the same year. But South Africa,  the second largest economy on the continent,  only created 14,000 jobs in the sector in Q3 2014, while shedding 41,000 jobs between Q1 and Q2, according to Statistics South Africa, the official data manager in the country.

“The increase (in Nigeria’s manufacturing job creation) has been as a result of improved performance in production output and the corresponding increase in the rate of capacity utilisation,’’ says the Manufacturers Association of Nigeria (MAN), while explaining why employment has been on  a rise in the sector, in its 2013 economic review.

The Federal Government introduced a policy known as the  Backward Integration Policy (BIP) in cement and sugar, to make firms that consume  raw materials acquire their suppliers or set up their own facilities to ensure a more reliable or cost-effective supply of inputs.

Read also: Anchor Borrowers Scheme gains traction as more farmers enter scheme

The policy brought in investors such as Dangote Cement, Bua Group and has also consolidated Lafarge’s stakes in the United Cement Company (UniCem), Ashaka and Atlas.

Already annual cement output has reached about 43.5 million metric tonnes (MT), from about 2 million MT recorded by 2002 when BIP was introduced. Capacity utilisation in the industry has peaked at 70 percent, while about 91 percent of limestone, gypsum and other raw materials are now locally sourced , according to MAN’s 2013 data. MAN also says the non-metallic products sector, particularly cement, has generated more jobs than any other industry.

“Presently, we have a total of 640 employees and as part of our engineering succession, we plan to employ many artisan graduate trainees  to encourage youths and prepare them for self-employment,” said Umaru Kwairanga, chairman of the board of AshakaCem plc, during  a ground-breaking expansion ceremony in Gombe State, in April 2014.

In the sugar industry, the government, through the Central Bank of Nigeria’s trade and exchange department, began the BIP policy by making importation of equipment for sugar manufacture duty-free, with a tax holiday of five years.

Raw sugar was also to attract an import duty rate of 10 per cent, plus levy of 50 per cent, while refined sugar would attract an import duty of 20 per cent plus a levy of 60 per cent.

Since 2013, BIP has brought in over $2.6 billion investments from Dangote Sugar Refinery, Flour Mills, Crystal Sugar, McNichols and  Locke Sugar, among others, according to Latif Busari, executive secretary, National Sugar Development Council (NSDC).

Many sugar cane farmers who left the business for not finding markets for their products, have now found new jobs.

“Farmers are now our great partners,’’ said  Graham Clark, group managing director, Dangote Sugar Refinery (DSR)  in an interview with BusinessDay.

“In Adamawa, we assist them with technical input, in the procurement of fertilizer, in the maintenance of equipment and most importantly, guarantee them ready market,” Clark said.

Similarly, the new auto policy has created new jobs as PAN resumed assembly of Peugeot cars last July, while VON is already assembling Nissan and Hyundai vehicles, just as Innoson has begun the assembly of  70 percent made-in-Nigeria vehicles.

More so, government’s policy, which paid more emphasis on high local content, has cut down on export of raw materials and export of jobs. Currently, local input content has hit 59 percent, while many more people have joined intermediate firms  as employees.

“Most manufacturers are finding ways of adapting to the use of local raw materials where such are available. The essence is to save foreign exchange for the country and simultaneously save costs,’’ says MAN.

ODINAKA ANUDU &  JOSEPHINE OKOJIE