The National Bureau of Statistics released its third quarter GDP numbers on Monday showing Nigeria’s real growth contracted by 2.24%. Most sectors continued on the part of recession with mining and quarrying leading the way with -22%. However, the manufacturing sector also remained as one of the major under performers remaining stuck in recession with a 4.38% GDP contraction.
The sector has been in a recession since at least the first quarter of 2015 making this quarter the 7th consecutive quarter of negative GDP growth rate.
One sub sector that has contributed the most to the woeful performance of the Manufacturing sector is the Motor Vehicles and Assembly sub-sector. Though contributing just 0.05% of total GDP, the sector recorded a negative GDP of -33%. Here is a run down of the sectors GDP growth rate in the last one year plus.
2016
Q1| -19.19%
Q2| -29.35%
Q3| -33.31%
No other sector has contracted this much in 2016 and suggest the government’s motor vehicle automative plans may be in shambles. These sort of numbers are an obvious disincentive to potential investors who may be favorably disposed towards investing in Nigeria’s motor vehicle industry. With the increase in tariffs and shortage of forex, Nigerians are now forced to contend with a double whammy of expensive locally assembled motor vehicles and imported ones. Locally assembled cars also require foreign inputs which are affected by the depreciation of the naira.