Comparing Nigeria’s manufacturing sector with African peers

Nigeria’s manufacturing sector is outperforming some of its African peers in some areas, according to BusinessDay research.

Nigeria’s Purchasing Managers’ Index (PMI) hit 59.3 basis points in December of 2017 from 55.9 reported in November, according to the Central Bank of Nigeria (CBN).

The Purchasing Managers’ Index (PMI) shows the economic health of the manufacturing sector in terms of new orders, inventory levels, production, supplier deliveries and the employment.

A composite PMI above 50 points indicates that the manufacturing sector is generally expanding; 50 points indicates no change, and below 50 points indicates that it is generally contracting.

Manufacturing PMI for South Africa, Africa’s second largest economy, declined to 44.9 in December of 2017 from 48.6 in the previous month.

The PMI of Kenya, an emerging East African economy, rose to 53 in December 2017 from 42.8 in the previous month, according to Markit Economics.

The growth marks the first period of expansion since April 2017, due to reduced political tensions and improved customer demand. However, this is still lower than Nigeria’s.

Moreover, Nigeria’s manufacturing sector currently contributes 14.2 percent to the gross domestic product (GDP), according to the third quarter data by the National Bureau of Statistics (NBS). South Africa’s manufacturing GDP has hovered between 12 and 13 percent since 2015, while Kenya’s sits at 10 percent, according to BusinessDay checks.

However, South Africa’s capacity utilisation is about 80 percent, dwarfing Nigeria’s.

ODINAKA ANUDU