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Nigeria's manufacturing sector has experienced a substantial decline in its contribution to the Gross Domestic Product (GDP) over the past two quarters, dropping by 20.95% from the end of 2023 to the second quarter of 2024.
According to the National Bureau of Statistics (NBS) reports, the sector's contribution to GDP fell from 16.04% in Q4 2023 to 12.68% in Q2 2024, highlighting the sector's increasing struggles amid the country's economic challenges.
This progressive decline over the first half of 2024 underscores the sector's vulnerabilities, particularly in the face of ongoing economic and infrastructural challenges.
The manufacturing sector's contribution to Nigeria's GDP declined from 16.04% in Q4 2023 to 14.79% in Q1 2024 and further to 12.68% in Q2 2024.
The sector's nominal GDP growth slowed from 29.90% in Q2 2023 to 1.91% in Q2 2024, a significant decrease of 27.99 percentage points.
On a quarter-on-quarter basis, the sector experienced an 11.25% contraction in Q2 2024.
The real GDP growth in the manufacturing sector also declined from 1.49% in Q1 2024 to 1.28% in Q2 2024, indicating ongoing struggles in the sector.
Despite its diverse activities, the manufacturing sector in Nigeria has struggled to maintain its previous levels of output and contribution.
The current period is the most challenging in the history of the manufacturing sector, with about 767 manufacturing companies shutting down operations and 335 experiencing distress in 2023.
This is attributed to various economic difficulties, including exchange rate volatility, rising inflation, and a general worsening of the investment climate.
While Nigeria's Gross Domestic Product (GDP) experienced a year-on-year growth of 3.19% in real terms during the second quarter of 2024, the manufacturing sector is still struggling due to broader economic issues, including challenges in power supply, access to finance, and infrastructural deficiencies.
The persistent inflationary pressures and currency volatility have exacerbated these challenges, leading to reduced consumer demand and higher production costs.
