Lagos and Ogun generate N3.2tr out of N3.7tr national production
By Jeph Ajobaju, Chief Copy Editor
Lagos and Ogun produced 86 per cent of manufactured goods used locally and exported in the second half of 2021 (H2 2021) with a combined output worth N3.2 trillion out of N3.7 trillion produced in the country.
The latest Manufacturers’ Association of Nigeria (MAN) data shows that N3.73 trillion goods produced across 14 industrial zones nationwide, Lagos (Ikeja and Apapa) and Ogun zones accounted for the bulk and the remaining 12 zones N526 billion.
Ikeja zone recorded production worth N1.81 trillion and Apap zone N526.9 billion. Ogun industrial zone produced goods worth N867.3 billion.
Manufacturing production value amounted to N7.03 trillion in H2 2021 against N4.42 trillion in H2 2020.
MAN said the increase in manufacturing output in H2 2021 rode on increase in production in the new BUA cement factory in Sokoto, new African Glass factory that produces glass products, and five new paper mills that recycle waste paper into carton.
MAN noted, however, that the performance is still far below its potential growth and contribution to Gross Domestic Product (GDP) due to numerous challenges.
“Following direct feedback from manufacturers,” it said, “we recommend first and foremost that the government should create plausible incentives for investment in the development of raw materials locally through the backward integration and resource-based industrialisation initiatives.
“We recognise an urgent need for investment and production of Active Pharmaceutical Ingredients (API) in the country; this should be adequately incentivised to encourage significant private investments.”
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Impact of unstable power supply
MAN said power supply has improved slightly since 2019 based on average daily supply and outage but supply from the national grid is persistently inadequate, compelling manufacturers to invest heavily in alternative energy sources.
Some operators have invested in diesel generating plants, others are utilising gas plants, it added, as reported by The Guardian (Nigeria).
MAN lamented that the cost of running these plants is increased by spending on spare parts and other energy management apparatuses such as stabilisers, UPSs, and inverters.
“Unfortunately, the cumulative expenditure on these alternative energy sources and the high tariff associated with supplies from the national grid majorly account for the high cost of production in the sector, with the share of energy standing at a colossal 40 percent.”
MAN said its expenditure on alternative energy sources amounted to N45.04 billion in H2 2021 against N57.75 billion in H2 2020, a decrease of N12.71 billion or 22 per cent.
However, the figure rose by N12.86 billion compared with N32.18 billion in H2 2019. Expenditure on alternative energy sources totalled N77.22 billion in H2 2021 versus 81.91 billion in H2 2020.
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