Nigeria’s manufacturing index may feed into global forecast

AfriOne Ltd. manufacturing plant in Lagos. PHOTO: George Osodi/Bloomberg

Nigeria’s improving manufacturing and non-manufacturing sectors’ indices may feed into the latest global growth forecast of the World Bank Group, if sustained.

The Bretton Woods institution, in its January 2018 forecasts, put global economic growth up to 3.1 per cent after a much stronger-than-expected 2017 record.

In the new forecasts, the continued recovery in investment, manufacturing, and trade, as well as benefits from steady commodity prices, particularly the commodity-exporting developing economies, will lead the drive.

Nigeria, being one of the commodity-exporting economies, is reportedly stabilising with the rebound in commodity prices- crude oil, which raised its reserves and tamed the exchange rate volatility.

Consequently, the nation’s manufacturing index has shown an expansion for the ninth consecutive month, even reaching a record high of 59.3 points as at December.

The positive development spanned across production level; inventories new orders; supplier delivery time; and employment level.

The World Bank Group President, Jim Yong Kim, said: “The broad-based recovery in global growth is encouraging, but this is no time for complacency. This is a great opportunity to invest in human and physical capital.

“If policy makers around the world focus on these key investments, they can increase their countries’ productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and boosting shared prosperity.”

The word of caution remains sustainability, as the new forecasts said the projections are largely seen as a short-term upswing.

“Over the longer term, slowing potential growth- a measure of how fast an economy can expand when labour and capital are fully employed, puts at risk the gains in improving living standards and reducing poverty around the world,” the January 2018 Global Economic Prospects noted.

Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off.

Growth in emerging market and developing economies as a whole, is projected to strengthen to 4.5 per cent in 2018, as activity in commodity exporters continues to recover.

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