Increasing cost of production lowers manufacturers’ contribution to GDP

The contribution of the manufacturing sector to Nigeria’s Gross Domestic Product (GDP) during the fourth quarter of 2023 dropped from 8.40 per cent, as recorded in the corresponding period of the previous year, to 8.23 per cent, according to the GDP report for the fourth quarter published by the Nigerian Bureau of Statistics (NBS).

Analysts say, the slow down was as a result of the increase in cost of production occasioned by high fuel price and scarcity of foreign exchange.

On a quarter-on-quarter basis, the sector’s contribution to GDP dropped by 0.19 per cent, from 8.42 per cent to the current figure.

The manufacturing sector’s fourth quarter of 2023 Real GDP growth stood at a 1.38 per cent year-on-year increase, representing a slight decline from 2022 but an improvement from the previous quarter. Quarter-on-quarter growth stood at 9.54 per cent.

The manufacturing sector experienced a notable increase in Nominal GDP growth in the fourth quarter of 2023, reaching 38.06 per cent on a year-on-year basis.

This marked a significant leap of 29.20 percentage points from the 8.86 per cent growth observed in the same period of 2022, and a modest improvement of 1.47 percentage points over the previous quarter’s growth rate of 36.59 per cent.  

Additionally, the sector saw a quarter-on-quarter growth of 7.70 per cent during the final quarter of the year. 

Looking at the sector’s performance throughout 2023, there was a remarkable annual growth rate of 30.93 per cent, a stark contrast to the 6.93 per cent growth rate in 2022.

The manufacturing sector’s contribution to the Nominal GDP in the fourth quarter of 2023 was 16.04 per cent, which represents an increase from the 13.49 per cent contribution during the same quarter in 2022, though it slightly declined from the 16.18 per cent recorded in the third quarter of 2023.