In the second quarter of 2023, the contribution of the real sector to the Nigerian economy experienced a decline, falling to 2.20% year-on-year, as reported by the National Bureau of Statistics in its Gross Domestic Product (GDP) report.
This decline is also reflected in the quarter-on-quarter growth rate, which stood at -14.98%.
Real sector’s GDP contribution declines in Q2 2023
Comparing the second quarter of 2023 to the same period in 2022, the real sector’s contribution to GDP dropped from 8.65% to 8.62%.
Additionally, it was notably lower than the 10.13% recorded in the first quarter of 2023.
The manufacturing sector, which encompasses various activities like oil refining, cement production, food and beverage manufacturing, textiles, and more, has been significantly impacted.
Several challenges have been identified as the primary culprits behind this decline in the sector’s economic contribution during the second quarter.
These issues include bottlenecks that plagued the real sector, adversely affecting its performance.
The Manufacturers Association of Nigeria, in its Manufacturers CEOs Confidence Index report, revealed that the Aggregate Index Score of MCCI dropped from 54.1 points in the first quarter of 2023 to 52.7 points in the second quarter.
Manufacturing activities suffered due to multiple taxation, high energy costs, foreign exchange illiquidity, and the high cost of borrowing, among other factors.
These challenges led to low capacity utilization, job cuts, and the adoption of various survival strategies to sustain production activities.