Electricity supply averaged 10 hours H1 2019 -MAN

COMFORT EKELEME, Asst. Business Editor

The Manufacturers Association of Nigeria (MAN) has said that average hours of electricity supply in the first half of 2019 remained stable at 10 hours per day, which was the same recorded in the preceding half.

MAN also said  electricity supply particularly from the distribution companies though a core challenge of the manufacturing sector has been improving albeit marginally since the second half of 2018.

However, MAN noted that average number of power outage in the first half of 2019 increased to 5 times dally from the 4 times daily recorded in the second half of 2018.

Following the slight improvement in electricity supply to the sector, the association maintained that the expenditure on alternative energy in the first half of 2019 declined to N32.68 billion from N43.18 billion and N49.92 billion recorded in the first and second halves of 2018 respectively.

On the cost funding, the review shows that high cost of borrowing has continued to be a perennial challenge to the manufacturing sector, adding that in the first half of 2019, interest rate charged to manufacturers stood at 22.5; it stood at 23.01 per cent and 21.4 per cent in the first and second halves of 2018, respectively.

The review further noted that manufacturing sector capacity utilization slowed to 54.1 per cent in the first half of 2019 from 54.50 per cent recorded in same half of 2018; thereby indicating 0.4 percentage point decline over the period.

It also declined by 6.9 percentage point when compared with 61.0 per cent recorded in the second half of 2018, while the fall in capacity utilization of the sector in the period was as a result of poor macroeconomic, regulatory and infrastructure conditions in the economy.

While, analysis based on sectoral group presented a mixed result, capacity utilization declined in Food, Beverage and Tobacco group (55.3 per cent), Wood & Wood Products (49.4 per cent), Chemical & Pharmaceutical (47.4 per cent), Non-metallic (52.7 per cent) and Domestic/Industrial Plastic and Rubber group (52.2 per cent).  However, it increased in Textile Apparel & Footwear group (56.5 per cent), Pulp, Paper, Printing & Publishing (67.0 per cent), Electrical Electronics (48.2 percent) and Motor Vehicle & Miscellaneous Assembly group (56.3 per cent).

Also, in the second half of 2019, Capacity utilization in Textile Apparel & Footwear group increased by 6.13 percentage point when compared with 50.17 per cent recorded in the corresponding half of 2018.

However, the group declined by 3.4 percentage point when compared with 59.9 per cent recorded in the preceding half.

Conversely, capacity utilization in Chemical & Pharmaceutical group declined to 47.4 per cent in the first half of 2019 as against 53.1 per cent and 59.0 percent recorded in the corresponding half of 2018 and the first half of 2019 respectively.

Industrial zones analyses also presented a mixed-bag of performance:  capacity utilization in most of the zones increased in the first half of 2019 against the performance of the corresponding half of 2018 but declined when compared with the second half of 2018.

Consequently, in the period under review, capacity utilization in Ikeja zone increased to 68.14 percent; Ogun (69.19 per cent), Apapa (69.46 per cent), Kano Sharada/Challawa (55.11 per cent), Kaduna (49.5 per cent), Anambra/Enugu (43.8 per cent) and Rivers (54.07 percent). Conversely, capacity utilization in   Imo/Abia zone declined to 34.72 per cent, Kwara/Kogi (44.13 per cent) and Abuja (39.13 per cent) in the first half of 2019.

In the first half of 2019 capacity utilization in Ikeja zone increased by 12.96 and 0.54 percentage points when compared with 55.18 per cent and 67.6 per cent achieved in the first and second halves of 2018 respectively.

Conversely, capacity utilization in Kwara/Kogi zone declined to 44.13 per cent in the first half of 2019 as against 49.67 per cent and 53.5 per cent recorded in the first and second halves of 2018 apiece.

The review further disclosed that manufacturing production value slowed to N4.61 trillion, which indicates N0.15 trillion (3.2 per cent) decline from N4.76 trillion recorded in the corresponding half of 2018. It also slowed by N0.61 trillion (11.6 per cent) when compared with N5.2 trillion recorded in the second half of 2018.

Manufacturing production in the first half of 2019 was affected by the same challenges that hindered capacity utilization in the period such poor macroeconomic ambiance, infrastructure issues and poor regulation by Government agencies.

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