While the sector experienced a notable investment increase of 32.56 percent, reaching N429.47 billion from N323.98 billion in 2022, employment generation saw a significant decline of 37.83 percent, with only 10,133 jobs created compared to 16,300 in the previous year.
Additionally, capacity utilization decreased slightly by 1.3 points, falling to 55.1 percent from 56.4 percent in 2022.
This information was highlighted by Segun Ajayi-Kadir, the Director General of the Manufacturers Association of Nigeria (MAN), during the presentation of the 2023 Annual Report at the association's 52nd Annual General Meeting.
He stated: “The manufacturing sector witnessed investment growth in naira terms during the second half of 2023, reaching N236.57 billion from N192.89 billion recorded in the first half of the year. This represents a significant rise of N43.68 billion or 22.65 percentage points when comparing the two periods.
“Furthermore, the sector’s accumulated investment for the entire year of 2023 rose to N429.47 billion, marking a 32.56 percentage point or N105.49 billion increase when compared to N323.98 billion recorded in 2022.
“This upward trend in investment (monetary terms) within the sector during the review period was driven by the devaluation of the naira.”
MAN highlighted the significant impact of the naira redesign policy implemented in the first half of 2023, as well as the consequences of the new administration’s policy mix, which included the removal of fuel subsidies and the unification of the exchange rate, on the manufacturing sector.
“The manufacturing sector experienced a significant decline in employment generation in the second half of 2023. The number of jobs created fell from 6,412 in the first half to 3,721 in the second half revealing a 41.97 percent decrease over the period.
“Furthermore, the total jobs created for the entire year stood at 10,133, thus indicating 37.83 percent reduction compared to 16,300 jobs recorded in 2022.
“A considerable number of manufacturing firms ceased operations during this time, further exacerbating the pressure on employment rate.
“The capacity utilisation rate dropped from 56.5 percent in the first half of 2023 to 53.6 percent in the second half of the year, revealing a 2.9 percentage point reduction. Consequently, the average capacity utilisation for 2023 dropped to 55.1 percent from 56.4 percent recorded in 2022 indicating 1.3 percentage point reduction over the period,” Ajayi-Kadir added.