The Nigerian economy is still far from being diversified, according to the Manufacturers Association of Nigeria (MAN), despite the non-oil sector’s contribution of 94.34 percent.
MAN’s argument was based on the fact that South Africa’s top four export earners—mineral products (25%) (precious metals (17%), vehicles and aircraft vessels (12%), and steel products—are less evenly distributed than the oil sector, which currently accounts for about 80% of the nation’s export earnings (12per cent).
In a statement about MAN’s stance on the Gross Domestic Product (GDP) report for the third quarter of 2022, Director General Segun Ajayi-Kadri argued that the country’s ongoing economic crisis has further underlined the urgent need to release an updated unemployment rate that corresponds with the current economic situation.
According to him, the slowdown in growth will lead to more unemployment, which could reduce people’s ability to pay taxes, which would worsen the ratios of debt to GDP and debt service to revenue.
“Therefore, it is predicted that economic growth would decrease further in coming quarters,” he continued.
Due to the fact that strong economic growth is one of the indicators of manageable debt, Nigeria’s credit rating will be further impacted.
The nation’s credit rating was recently reduced by Moody’s and Fitch.
“It is anticipated that the country’s chances of obtaining external development funding will be severely reduced as the credit rating continues to deteriorate. The pace of development initiatives would surely slow down as a result,” he stated.
However, he urged the federal government to increase capacity building, provide suitable security equipment, and provide technologies for monitoring and intelligence collection in order to combat insecurity and smuggling.
Segun Ajayi-Kadri, director general of MAN, stated the association’s view on the Gross Domestic Product (GDP) report for the third quarter of 2022 and noted that the Nigerian economy is still extremely susceptible to an increase in oil prices.
According to a recent study by the National Bureau of Statistics (NBS), the third quarter of 2022 saw a 2.25 percent real GDP growth in Nigeria.
The most recent performance represents a 1.78 percentage point shortfall from the 4.03 percentage point real GDP growth reported in the third quarter of the previous year.
The MAN DG urged the government to continue including all stakeholders in order to assist security along the oil infrastructure and make sure they benefit from the surveillance contract that has been granted.
He contends that strategies must be used to promote local raw material sourcing, enhance infrastructure improvements, and lower unemployment while increasing manufacturing productivity.
Ajayi Kadri also emphasized the necessity of abandoning the ineffective hard peg policy and establishing a clear and transparent market structure to direct the Central Bank of Nigeria’s (CBN) involvement in the foreign exchange market.
He also emphasized the necessity of coordinating monetary and fiscal policy, as well as the need to reduce fiscal deficits by gradually eliminating fuel subsidies.