The manufacturing sector PMI declined from 58.3 points to 51.1 points between February and March 20201. The slowdown was triggered by reduced growth in 7 subsectors including electrical equipment, chemical and pharmaceutical products, primary metals and non-metallic mineral products. Similarly, the non-manufacturing PMI index declined to 49.2 percent, falling below the 50 percent threshold for the first time in over 2 years1. The overall contraction is due to the depression in global economic activity which has led to a reduction in new orders, inventory and consequently employment levels across the manufacturing and non-manufacturing sectors. In the coming months, the reduced activity across both sectors is expected to continue as a result of the decline in global demand for exports and the reduction in local consumption. In the meantime, some manufacturers can switch to producing essential commodities that are required to tackle the pandemic. In addition, the cash transfers by the government should be distributed to manufacturing and non-manufacturing workers that would be laid off or furloughed as a result of the pandemic.
April 20, 2020
Nigeria Economic Update (Issue 13)
Related
Nigeria Economic Update (Issue 8)
Recent
data from the National Bureau of Statistics (NBS) show that total capital
importation in 2015 fell steeply by 53.5 per cent from $20,750.76 million in
2014 to $9,643.01 million in 20152. This decline was largely driven
by a substantial drop in portfolio investment (the largest component of Capital
Inflows), which fell by 59.74 percent. The exclusion of Nigeria from the JP Morgan
EM Bond index, the slump in crude oil prices, the decision of the US Federal
Reserve to raise interest rates and the capital control measures imposed by the
Central Bank of Nigeria (CBN) are the notable drivers of the reduced inflow of
capital. Going forward, improving the business environment, especially easing
foreign exchange controls, would determine the extent to which the economy can
attract increased capital inflows.