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Macro-Economic News

Manufacturing sector expands for the 18th consecutive time

Manufacturing PMI for the month of September stood at 56.2 index points.



Factory, Manufacturers lament over N5 billion loss of goods 

The manufacturing sector of the Nigerian economy has maintained its expansionary trend for the 18 consecutive months, according to the Central Bank of Nigeria (CBN) in its Purchasing Managers’ Index (PMI) Survey Report for September 2018. PMI indicates changes in the level of business activities in the current month compared with the preceding month.

The report indicates that Manufacturing PMI for the month of September stood at 56.2 index points while composite PMI for the Non-manufacturing sector stood at 56.5 index points, during the month under review, indicating expansion in the sector for the seventeenth consecutive months.

A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change, and below 50 points indicates that it is generally contracting.

Manufacturing PMI

The Manufacturing (PMI) index grew at a slower rate when compared to the index in the previous month of August (57.1). Out of the 14 sub-sectors surveyed in the month of September, 11 reported growth in the following order:

  • Electrical equipment.
  • Printing and related support activities
  • Transportation equipment
  • Nonmetallic mineral products
  • Chemical & pharmaceutical products;
  • Fabricated metal products
  • Furniture & related products
  • Textile, apparel, leather and footwear
  • Food, beverage & tobacco products.
  • Petroleum & coal products
  • Plastics & rubber products.

The remaining three sub-sectors contracted in the following order:

  • Petroleum & coal products
  • Paper products
  • Primary metal

Still on the manufacturing sector, the production level index grew for the nineteenth consecutive month in September 2018, to stand at 58.4 points. The index indicates a faster growth in the current month when compared to its level in the preceding month of August.

Also, the employment level in September stood at 54.9 points, indicating growth in employment level for the seventeenth consecutive month.

Non-manufacturing PMI

Meanwhile, the Non-manufacturing PMI index also grew at a slower rate during the month under consideration when compared to the index in the previous month of August (58.0). Out of the 17 sub-sectors surveyed in the month of September, 15 reported growth while 3 sub-sectors recorded contraction.

The business activity index grew for the eighteenth consecutive month in September 2018, to stand at 58.1 points, indicating expansion in non-manufacturing business activity. However, the employment level in September stood at 55.4 points, indicating growth in employment level for the seventeenth consecutive month.


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Macro-Economic News

Nigeria’s company income tax revenue drops to N1.41 trillion in 2020

Income tax revenue stood at N1.41 trillion in 2020, indicating a 13.35% decline.



Taxes you should be aware of before starting a business in Nigeria

Nigeria’s company income tax revenue stood at N1.41 trillion in 2020, indicating a 13.35% decline when compared to N1.63 trillion recorded in the previous year.

This is according to the latest CIT report released by the National Bureau of Statistics (NBS).

According to the report, the latest figure represents the second consecutive drop in company income tax revenue. The N1.41 trillion CIT collection represents a 13.4% decline as against N1.62 trillion in 2019 and a 0.49% decline when compared to N1.42 trillion recorded in 2018.

READ: Nigeria’s pension funds continue to divest from treasury bills

Others on the list include; Banks and financial institutions (N96.4 billion), commercial and trading (N68.5 billion), while breweries, bottling, and beverages remitted N53.2 billion in company income tax.



  • A total of N790.6 billion was collected locally, accounting for 56.1% of the total company income tax collections.
  • N238.1 billion was in form of other payments, which represents 16.9% of the total collections.
  • while Foreign CIT payments (N380.8 billion) accounted for 27% of the total collections.
  • Professional services top the list of sectors with the highest contributions at N180.26 billion, followed by other manufacturing sector with N100.4 billion company income tax payment.
  • A total of N343 million was received from the mining industry, representing the sector with the lowest CIT remittance in 2020.

Textile and Garment industry jumped over 100%

The textile and garment industry recorded the highest year-on-year increase in CIT remittances, as it increased its company income tax by 100.23% from N179.8 million recorded in 2019 to N359.9 million in 2020.

  • Transport and haulage services followed with a gain of 46.28% to stand at N45.6 billion, publishing, printing, paper packaging grew by 36.4% to stand at N2.1 billion.
  • Also, Stevedoring, clearing, and forwarding grew its company income tax by  28.5% to stand at N7.2 billion from an initial remittance of N5.6 billion in 2019.
  • On the flip side, petro-chemical and petroleum refineries recorded 45.4% decline in CIT collected in 2020, closely followed by the federal ministries and parastatals, which recorded a decline of 38.9% to stand at N22.5 billion.

The decline in company income tax could be attributed to the disruption caused by the covid induced lockdown, which affected most business organisations for most parts of the year.


Also, recall that Nairametrics had reported earlier in 2020, that the federal government has decided to exempt small businesses with an annual turnover of less than N25 million from Company Income Tax.

Bottom line: Nigeria’s economy was ravaged by the covid-19 outbreak in 2020, forcing restrictions on movement across the country. This affected the profitability of most businesses in the country, consequently affecting company income tax revenue generated by the Nigerian government.

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Macro-Economic News

Nigeria generates N1.53 trillion VAT in 2020, grows by 29%

VAT revenue grew by 29.3% compared to N1.18 trillion recorded in 2019 as professional services sector tops with N162.3 billion remittance



Nigeria generated a total sum of N1.53 trillion revenue from Value Added Tax (VAT) in 2020, up by 29.3% when compared to N1.18 trillion recorded in 2019.

This is contained in the Sectoral value-added tax report, recently released by the National Bureau of Statistics (NBS).

According to the report, VAT revenue grew by 29.3% compared to N1.18 trillion recorded in 2019 and 38.2% increase as against N1.11 trillion in 2018.

READ: CBN advises government to adopt “Big Bang approach” to fixing economy


  • In 2020, professional services generated the highest amount of VAT with N162.32 billion remittances, closely followed by other manufacturing sectors with N154.15 billion.
  • Non-import VAT generated locally grew by 30.5% in 2020 to stand at N763.01 billion as against N584.6 billion received in 2019.
  • Non-import foreign VAT also stood at N420.4 billion. This indicates an increase of 17% when compared to N359.5 billion generated in the previous year.
  • Import VAT generated by Nigeria Customs Service jumped by 44.6% to stand at N347.7 billion as against N240.5 billion recorded in 2019.
  • Out of the twenty-eight (28) sectors, twenty-four (24) of them recorded positive growth in VAT remittance, while only four sectors recorded a decline in the period.
  • VAT remittance by the transport and haulage services sector grew significantly by 78.8% to stand at N43.5 billion, closely followed by Agricultural and plantation sector with 65.4% increase to stand at N4.34 billion.

READ: Nigeria’s VAT Increase: Penny-Wise, Pound Foolish


Despite the economic downturn experienced by the country due to the lockdown measures put in place by the government in response to the Covid-19 pandemic and decline in global oil prices, VAT revenue increased significantly in the year. A development, which is largely attributable to the increase in VAT rate from 5% to 7.5% under the Finance Act implemented in February 2020.

READ: Nigeria’s records 6.1 percent tax to GDP as tax base for VAT rise to N23.7 trillion

Professional Services overtakes Manufacturing sector

In 2019, other manufacturing sector topped the lists of sectors with the highest VAT remittances, with a total of N124.14 billion in VAT. However, professional services took over in 2020 with a 44.8% increase to stand top with a total VAT remittance of N162.32 billion.


Meanwhile, other manufacturing followed with N154.2 billion, Commercial and trading with N77.4 billion, Breweries, bottling, and beverages at N59.7 billion, while State ministries and parastatals remitted a total of N59 billion in value-added taxes.

Other sectors that made up Nigeria’s top 10 biggest VAT sources during the period include, transport and haulage services (N43.5 billion), oil-producing (N43.4 billion), Federal ministries and parastatals (N26.3 billion), Banks and financial institutions (24.8 billion), and finally a sector not classified with N22.9 billion remittance.

On the flip side, mining generated the lowest VAT with N250.9 million remittance, followed by the textile and garment industry (N1.19 billion), pharmaceutical, soaps and toiletries (N1.4 billion), local government councils (N1.9 million), and publishing, printing, paper packaging (N2.08 billion).

READ: Nigeria spends N29 trillion on recurrent (non-debt) expenditure in last 10 years

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VAT is growing but still not enough

Recall that in the 2019 budget, Nigeria projected a total Value Added Tax revenue of N1.7 trillion as it anticipated higher tax revenues from vatable goods and services but achieved 69.8% of the target as generated a sum of N1.18 trillion during the period.

Similarly, the federal government only achieved 75.4% of the targeted N2.03 VAT revenue in 2020, having generated a total of N1.53 trillion. We can also recall that the recently signed 2021 budget puts Nigeria’s overall budget deficit at N5.6 trillion, which is expected to be funded through both domestic and foreign borrowings.

With oil prices still around $50 per barrel and the resurgent cases of covid-19 worldwide, which puts pressure on Nigeria’s oil revenue as the country aims to recover from the pandemic induced recession.

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READ: A look at how much Nigerian banks paid their staff in 9-month 2020

Bottom line

The increase in VAT collection is a welcome development to the Nigerian government but needs to intensify effort in creating innovative ways of increasing revenue given growing overheads and statutory spending, coupled with increasing debt profile.

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Macro-Economic News

CBN retains MPR at 11.5%, holds other parameters constant

In its first MPC of 2021, CBN votes to MPR at 11.5% and other parameters constant.



CBN forex restrictions on food itemsCBN approves new cheque standard for banks

The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted unanimously to retain the Monetary Policy Rate (MPR) at 11.5%

This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday 26th January 2021.

Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.

READ: Nigeria’s GDP growth to rebound between 1.7% and 2.0% in 2021 – United Capital report

Highlights of the Committee’s decision

  • MPR retained at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • While Liquidity Ratio was also kept at 30%

According to Emefiele, MPC was of the view that it should pursue its current stance of systematic synchronization of monetary and fiscal policy accommodation through its developmental finance initiatives. This is aimed at quickening the recovery process of the country’s economy.

“Although the economy is currently in a stagflation environment with simultaneous occurrence of inflationary pressures and contracting output, the MPC resolved to reverse both developments and continue pursuing price stability in growing the economy”, He said.

On the other hand, the committee also opined that an aggressive expansionary stance could worsen both inflation and the negative real interest rate, thereby affecting the exchange rate negatively.

READ: CBN issues modalities for payout of diaspora remittances in dollars


CBN’s move to quicken economic recovery

According to the report, The Central Bank has committed a substantial amount of money towards its effort to mitigate the impact of the covid-19 pandemic on the economy.

  • Notably, a total disbursement of N20 trillion has been made as at January 2020 to cushion the effect of the pandemic.
  • It also stated that from the Covid-19 Targeted Credit Facility (TCF) meant for household and small businesses, a total of N192.64 billion has been disbursed to 426,016 beneficiaries.
  • N106.96 billion have also been disbursed to 27,956 beneficiaries under the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)
  • While 72.96 billion has been deployed to 73 projects in the Health Care Support Intervention Facility.
  • Other areas where the CBN had deployed funds include; the Creative Industry Financing Initiative and Nigerian Youth Investment Fund, National Mass Metering Programme.

READ: Analysts predict higher inflation rate for Nigeria in 2021

Outlook for the economy

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  • The committee reiterated that available data and forecasts for key macroeconomic variables for the Nigerian economy suggest a further improvement in output growth in Q1 2021. A development, which would be supported by the coordinated and sustained interventions of the monetary and fiscal authorities.
  • Some other interventions that would also support the intended growth include the broad-based stimulus and liquidity injections.
  • Inflationary pressure is expected to commence moderation as the economy’s negative output gap closed.
  • The committee, however, raised concerns over uncertainties in the oil market and the current uptick in the second wave of covid-19 infection rate as it could pose some downside risks to this forecast.

READ: CBN to prevent exporters with unrepatriated export proceeds from banking services

What this means

  • The Central Bank’s decision to retain the benchmark interest rate at 11.5% is in line with its move to boost consumer spending by increasing credit facilities to households, SMEs, health, agricultural, and the manufacturing sector so as stimulate the Nigerian economy.
  • Holding the rate will also encourage borrowing, as lending rate by banks is expected to remain low.

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