Foreign capital inflow to manufacturing down QoQ
By Jeph Ajobaju, Chief Copy Editor
Foreign investment in Nigeria’s manufacturing slashed 35 per cent quarter-on-quarter (QoQ) from $392.5 million in the fourth quarter of 2022 (Q4 2022) to $256 in Q1 2023, latest figures from the National Bureau of Statistics (NBS) show.
The report said total capital importation was $1.1 billion in 2022, less than $1.5 billion in Q1 2022, a 28 per cent drop.
Capital inflow to the production sector ranked second with 22 per cent share of total investments, behind the banking sector with $304.5 million or 26.89 per cent of total capital imported in Q1 2023.
The Manufacturers Association of Nigeria (MAN) has warned the increasingly harsh business environment – caused by high energy costs, lack of access to funding, multiple taxation, among others – has scaled down investment in the sector.
MAN Bi-Annual Economic Review shows investment in manufacturing dipped to N145.59 billion in the second half of 2022 (H1 2022) versus N160.88 billion in H1 2021, a decline of N15.29 billion or 10 per cent.
Manufacturing investment further declined by N32.8 billion or 18 per cent compared with N178.39 billion in H1 2022. Investment in the sector amounted to N323.98 billion in 2022 against N305.02 billion in 2021.
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MAN lists hurdles
MAN President Segun Ajayi-Kadir attributed the decrease to mainly government debt issues, high borrowing and energy expenses, and weak consumption, via reporting by The PUNCH.
He said more international manufacturing companies may leave the country if power distribution companies (DisCos) increase their tariff.
Ajayi-Kadir reiterated some international manufacturers have already exited Nigeria because of unstable electricity supply coupled with unpredictable foreign exchange (forex) rate before it was unified in June.
“Manufacturers provide almost every infrastructure by themselves. Outside the major roads, you find out that manufacturers provide water, power, security, etc. So, when you look at it, you find out that the cost of doing business is so huge,” he said.
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