RETROSPECT >>

Uncertainties over the future of the Nigerian economy at the beginning of the year was hinged on the concerns over the March/April general elections occasioned by elections which exposed industries and small enterprises to enormous shocks.

The result of the shocks can be illustrated in data: industrial production in Nigeria decreased 6.60 per cent in the second quarter of 2015 over the same quarter in the previous year.

The Central Bank of Nigeria (CBN) reported that industrial production, which measures output of businesses integrated in industrial sector of the economy, averaged 1.81 per cent from 2007 to 2015, reaching a record low of -6.60 per cent in the second quarter of 2015.

Manufacturing, which many of the industries and small enterprises are into, also suffered a serious setback as evident in the report released by the National Bureau of Statistics (NBS) in the second quarter of the year.

The NBS reported that nominal Gross Domestic Product (GDP) growth of manufacturing in the second of quarter of this year was estimated at 0.07 per cent, translating to 19.46 per cent points lower than the 19.54 per cent recorded in the corresponding period of last year.

The report attributed the drop to “result of higher operating costs” of industries and small enterprises.

To further illustrate the poor performance of manufacturing as an integral part of the industrial sector of the economy, the NBS reported that “the real GDP growth estimate of the manufacturing sector equally went down by 17.83 per cent points to -3.82 per cent, from 14.01 per cent recorded in second quarter of 2014.”

Manufacturing include activities of industries and small enterprises in oil refining, cement, food, beverages, tobacco, textile, apparel, footwear, wood, paper products, chemical products, pharmaceutical products, non-metallic products, plastic products, rubber products, electricity, electronics, basic metal, iron, steel, motor vehicles and assembly.

In terms of budgetary allocation to drive growth in the industrial sector, the federal government did not deem it necessary to allocate funds for capital projects to agencies under the Ministry of Industry, Trade and Investment in the 2015 budget.

The federal government allocated less than 2.9 per cent of the total budget of the ministry for capital projects limited to the headquarters.

The Ajaokuta Steel Company remained moribund throughout the year as the company got zero budgetary allocation for capital projects for 2015.

Lamenting, in Abuja, the zero allocation before members of the House of Representatives committee on Steel Development in within the year, the Sole Administrator of the company, Engineer Joseph Onobere Isah, said the company still requires a salvage value of over $3 billion.

Eng Isah told the members that work on the first phase has remained at about 98 per cent completion stage since 1994. Government, he informed, has stopped further capital development on the plant ostensibly due to dearth of funds.

For auto companies, the high customs duty charged by the federal government on imported brand new cars remains a major challenge as dealers say it encourages the import of second-hand cars into the country.

Speaking exclusively to Daily Trust at an auto exhibition recently held in Abuja, the Executive Director of CIG Motors Company Limited, Khadijah Junaid, lamented that it is part of the reasons many Nigerians buy secondhand cars because they are relatively cheaper.

“Government increased duty on new vehicles from 30 per cent to like 70 per cent. Imagine the margin! There is no how it will not affect the price of a new car,” she said.

However, to mitigate the high price of new vehicles and help low and medium income earners in the country buy new cars, some auto companies launched auto credit schemes within the year.

For instance, the Peugeot Automobile Nigeria (PAN) agreed on a memorandum of understanding (MoU) on auto loan alliance with the First City Monument Bank (FCMB) in October to enable Nigerians who wish to buy Peugeot cars do so on loan and repay monthly for as less as N80,500 spread across four years.

One major development that cut short the dream of some investors aspiring to venture into the auto sector was the suspension, by the Automotive Design and Development Council (NADDC), of issuance of licences for new auto assembly plants in the country.

The Director-General of the council, Engr. Aminu Jalal, had in a statement said the decision was to allow for local content development in the area of vehicle manufacturing.

Jalal had moved implementation of the the full Nigerian Automotive Policy from January 2015 to April and subsequently to July before finally suspending the implementation till further notice.

On Foreign Direct Investment (FDI) into Nigeria, the NBS reported that capital import dropped by about 54 per cent in the second quarter of this year compared to the same period last year.

Indicative of the prevailing economic uncertainty in the country, especially at the beginning of the year, estimates indicated that capital import into Nigeria dropped to $3.137 billion, from the $5.80bn imported in the second quarter of 2014.

The Nigeria Investment Promotion Commission (NIPC), which is saddled with the responsibility of attracting investments and FDI into the country, was engulfed in crisis between the leadership and the staff at the beginning of the year.

The staff accused the then Executive Secretary of the commission, Mrs. Saratu Altine Umar, of alleged fraudulent grant of waivers and of incompetence which led to her sack in May and replacement with Mrs. Uju Aisha Hassan-Baba.

The NIPC was not the only key agency in the industrial sector that witnessed crises during the year. The Industrial Training Fund (ITF) also witnessed disruption of activities due to separate protests from trainees and staff.

Recently, staff of the fund staged protests across the country and went on warning strike on allegation of financial impropriety levelled against the Director-General, Mrs Juliet Chukas-Onaeko.

While Chukas-Onaeko had since denied the allegation, it can be recalled that trainees of the fund had protested in April this year in Abuja over inadequate equipment that would enable them complete their trainings.

An obvious indication that industries in Nigeria have had it tough was the recent drop by $5bn in the net worth of Aliko Dangote, a leading player in sugar and cement industries.

The Forbes magazine reported that Dangote, president of the Dangote Group, recorded a net worth of $16.7bn this year, a drop of $5bn from his fortune recorded in 2014.

A lecturer at the Kaduna State University, Dr. Aminu Usman, blamed the dip in Dangote’s fortunes on Nigeria’s sliding currency, poor performance of the capital market, international community’s scepticism of the future of Nigeria’s economy and federal government’s delay in forming the nation’s economic management team.

“When you look at what the players in the Nigerian capital market are saying, they had lost over N1trn by the time the new government came into being. Definitely, it will affect people like Dangote whose major shareholding are listed on the market. So if the entire market lost over a trillion naira, the major players in that market are the ones badly hit,” the Dr Usman told the Daily Trust.

Furthermore, companies involved in export suffered a setback as the European Union suspended, until June 30, 2016 imports of selected products that originate from Nigeria.

The Head of Trade and Economics Section of the European Union Delegation to Nigeria and the Economic Community of West African States (ECOWAS), Filippo Amato, told our correspondent that the suspension was as a result of the presence of the unauthorised pesticide, dichlorvos, at levels largely exceeding the acute reference dose tentatively established by the European Food Safety Authority.

Amato urged the Nigerian authorities to provide an export control plan to assure that the products exported to the EU comply with the EU minimal risk levels for hazardous substances before the ban could be lifted.