The Purchasing Managers’ Index (PMI) for the manufacturing sector released recently by the Statistics Department of the Central Bank of Nigeria (CBN) which stood at 49.4 index points, indicating a reversal of five consecutive months of contraction from May, indeed, portends a good omen for the nation’s economy.
The result of the PMI survey showed that the manufacturing PMI for the month of September was 46.9 index points. The survey revealed that of the 14 subsectors surveyed, six recorded expansion above 50 per cent threshold.
Subsectors that reported expansion were electrical equipment, transportation, equipment, printing and related support activities, chemical and pharmaceutical products, textile, apparel and footwear, as well as cement.
The remaining eight subsectors reported contraction. They are primary metal, petroleum and coal product, paper products, fabricate metal products, furniture and related products, nonmetallic mineral products, plastic and rubber products and food, beverage and tobacco products.
The survey indicated that in employment level in the review month two subsectors recorded stationary level of employment while the remaining nine subsectors recorded lower employment levels. PMI for the non-manufacturing sector, however, stood at 46.8 points in October 2020, indicating contraction in nonmanufacturing PMI for the seventh consecutive month.
The survey stated, “of the 17 sub-sectors surveyed, three subsectors reported growth in the following order: electricity, gas, steam and air conditioning supply, art, entertainment and recreation and Health care and social assistance.
“Eleven subsectors reported declines in the following order: management of companies; utilities; Information and communication; construction; professional, scientific, and technical services; repair, maintenance/washing of motor vehicles.’’
Other declining subsectors are wholesale/retail trade; educational services; transportation and warehousing; accommodation and food services and real estate rental and leasing.
It is instructive that the federal government had in July promised to boost the current intervention support to the manufacturing and key sectors of the economy to improve their productivity amidst the impact of the Covid-19 pandemic.
The Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, said the government has also evolved quality policies to help them emerge from the pandemic more strongly against predictions of economic doom by some international agencies.
While awarding members of the Emergency Operations Centre (EOC) of the Committee on Sustainable Production and Delivery of Essential Commodities during Covid-19, the minister emphasised the need to boost local production of key commodities.
He said: “For the first time in our nation, we all have to come together to tackle the vulnerability that the Covid-19 pandemic has exposed. As you all acknowledge, the lockdown that we have instituted to curb the spread of the virus resulted in a number of casualties across board as jobs were lost and supply was disrupted and led to shortfall in movement of goods and services.
“Our manufacturing sector continues to be our key focus as our economy continues to grow. From the market intelligence findings, more than ever before, we need to boost local production of key commodities required.
“Therefore, moving forward, our efforts as a response team at the Federal Ministry of Industry Trade and Investment has been recognised and we have been mandated to lead the presidential task force responsible to deliver increased capacity in local manufacturing.”
Also, the Minister of State for Industry Trade and Investment, Mrs. Mariam Katagum, said the pandemic has created a consciousness among Nigerians on the need for all stakeholders to look inward in solving the economic challenges.
She said: “From what happened during the pandemic, everyone was either producing masks or sanitisers. So what stops us after the pandemic to produce anything that we want to produce that we have the talent to do. This Covid-19 period has shown us we can achieve whatever we set out to do as a nation.”
The Permanent Secretary of the ministry, Mr. Nasir Sani-Gwarzo, said that the government would do all it could to ensure that the impact of the pandemic does not cripple the economy.
However, the Chairman of the EOC, Tijani Inuwa, said during the period of the inter-state travel ban, the committee received and resolved 121 cases of complaints of which about 76 per cent of the challenges are related to movement of manufacturing and pharmaceutical products.
He said about 10 ventilator companies, 46 producers of hand sanitizers, among others, were assisted to boost their current capacity during the period of the lockdown.
In line with this desire, the federal government on September 14, launched the Backward Integration Programme” Certificate (BIPC). The BIPC is an initiative designed to accelerate growth in the industrial sector.
Accordingly, the initiative will stimulate local production and identify bona fide processors, assemblers and manufacturers. It will also improve the ease of doing business in the industrial sector by engendering a coordinated approach to industrialisation, the minister said.
The CBN’s report on the growth recorded by the manufacturing sector in October after a five months lull is no doubt indicative of the fact that the federal government’s intervention in the sector is achieving its desired objective.
Much as this is commendable, we advise the federal government not to rest on its oars until a conducive atmosphere for manufacturing is provided. These include power, roads, credits, tax incentives, among others.