With a combined industrial production value of N3.2 trillion in the second half of 2021, the industrial regions of Lagos and Ogun are responsible for 86 percent of the manufactured goods consumed and exported in the country.
According to the latest data from the Confederation of Nigerian Manufacturers (MAN), of the locally produced goods worth 3.73 trillion nitrogen in 14 industrial regions nationwide, Lagos (Ikeja and Ababa) and Ogun regions accounted for the bulk of the locally produced goods while the remaining 12 regions recorded the value of Production amounted to 526 billion N.
This also reinforces the claim that Lagos and Ogun remain the industrial hubs of the nation.
Specifically, in Lagos, the Ikeja region recorded a production value of N1.81 trillion while the value of the Apap region fell to N526.9 billion. Ogun Industrial Park produced goods worth N867.3 billion in the second half of the year.
The total value of production in the manufacturing sector was 7.03 trillion N7.03 trillion in 2021 compared to N4.42 trillion recorded in 2020.
According to MAN, the increase in the value of manufacturing production in the second half of 2021 was associated with an increase in cement production due to the new BUA cement plant in Sokoto; New African Glass Factory which produces glass products; and activities of the five newly established paper mills which recycle waste paper into cartons.
Although the manufacturing sector improved during the year, MAN indicated that the performance is still far from its potential growth and contribution to national output due to the nearly innumerable challenges the sector faces.
“Following direct feedback from manufacturers, we recommend first of all that the government should create reasonable incentives to invest in developing raw materials locally through backward integration and resource-based manufacturing initiatives.
“We recognize the urgent need for investment and production of active pharmaceutical ingredients (API) in the country; this must be sufficiently stimulated to encourage significant private investment.”
Although MAN claimed that the electricity supply from the national grid has improved slightly since 2019 as evidenced by the average daily electricity supply and blackouts, local producers stated that the electricity supply from the grid has consistently been insufficient, forcing manufacturers to To invest heavily in alternative energy sources to maintain continuous production activity.
While some operators have invested in diesel plants, others use gas plants.
They lamented the increased costs associated with these plants by spending on spare parts and other power management devices such as stabilizers, UPS, and transformers.
“Unfortunately, cumulative spending on these alternative energy sources and high tariffs associated with supplies from national grids are mainly responsible for the high cost of production in the sector, where the energy share is 40 percent,” she added.
Depending on the specific circumstances, MAN said spending on alternative energy sources in the manufacturing sector amounted to N 45.04 billion in the second half of 2021 compared to N 57.75 billion recorded in the corresponding half of 2020; Thus, it indicates a decrease of N12.71 billion, or 22 percent, over the period.
However, the figure increased by N12.86 billion compared to the N32.18 billion recorded in the previous half. Spending on alternative energy sources amounted to 77.22 billion in 2021 compared to 81.91 billion in 2020. The decline in spending on alternative energy sources in 2021 is attributed to the marginal improvement in the national electricity supply during the period.
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