By Deborah Osagiede
Nigeria’s manufacturing sector growing??
Well Nigeria’s manufacturing sector growth has slowed down to the lowest in the last three years on the account of a cash shortage that crippled the economy during the period.
According to the new Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS), the sector grew by 1.61 percent (year-on-year) in real terms in Q1 2023, down from 2.83 percent in Q4 2022 and 5.89 percent in the same period last year.
These sectors contributed to the overall decline in Nigeria’s GDP growth as it fell to 2.31 percent in Q1, down from 3.52 percent in Q4 2022 and 3.11 percent in Q1 2021.
The trade sector also slowed to 1.31 percent in Q1, the lowest in two years from 4.54 percent in the previous quarter and 6.54 percent in Q1 2022.
Although the growth of the industry sector improved to 0.31 percent relative to the 6.81 percent recorded in Q1 2022, agriculture, and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to Q1 2022 – NBS said.
Due to the fact that Nigerians have a history of cash shortage in the beginning of the year, 2023 due to redesign of the naira by the central bank of Nigeria (CBN). Data from the central bank of Nigeria shows that the currency in circulation dropped to the lowest level in 14 years and five months to N982.1 billion in February from N1.39 trillion in the previous month.
But then the circulation rose to 71.41 percent to N1.68 trillion in March after the CBN moved naira notes from its vault to deposit money banks in response to the Supreme Court order to extend the legal tender status of the old N200, N500, and N1,000 notes to December 31, 2023.
“Every aspect of the economy was affected by the cash crunch. So whether you are a small-scale retailer or not, the cash crunch reduced the GDP of the country significantly,” Gabriel Idahosa, deputy president of Lagos Chamber of Commerce and Industry, said.