Manufacturers Association of Nigeria (MAN) has urged the Federal Government to establish a Manufacturing Development Bank in the country to cater for the credit needs of the manufacturing sector, especially as the  banks established by the government do not take care of the credit needs of the manufacturing sector.

A statement made available to Daily Sun shows that Nigeria’s maximum lending rate increased to 28.27 per cent in the fourth quarter of 2016 up from 27 per cent in the corresponding quarter of 2015, thereby indicating 1.27 percentage point increase over the period. It also increased by 1.03 percentage point when compared with 27.24 per cent of the preceding quarter.

Prime lending rate also increased to 17.08 per cent in the fourth quarter of 2016 from 16.9 per cent recorded in the corresponding quarter of 2015, indicating 0.18 percentage point increase over the period. However, it fell by 0.06 percentage point when compared with 17.14 per cent recorded in the preceding quarter.

Survey by MAN shows that manufacturing investment totalled N614.55 billion in 2016 as against N489.45 billion of 2015, indicating N125.1 billion increase over the period.

It stated that the plant and machinery ranked highest with investment worth N189.84 billion, followed by land and building with N86.58 billion; assets under construction followed next with investment worth N64.48 billion; motor vehicle was N58.05 billion; and lastly furniture and equipment with investment worth N49.97 billion in the review period.

The survey also shows that 69.9 per cent of total  manufacturing investment in the review period, which stood at N448.94 billion, went to Ogun, thus   retaining the zone as the investment haven of the nation. Investment in Ogun increased to N313.62 billion in the review period from N302.26 billion of the corresponding half of 2015, thus indicating N11.36 billion increase over the period. It also increased by N259.07 billion when compared with N54.55 billion recorded in the preceding half. Investment in the zones totalled N368.16 billion in 2016 as against N430.55 billion recorded in the 2015, indicating N62.39 billion decline over the period.

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The statement said the local sourcing of raw materials gained momentum in 2016 following the keying-in of manufacturers into the resource-based industrialisation and backward integration agenda of the government.

It noted that local raw material utilisation increased to 59.98 per cent in the period under review from 51.88 per cent recorded in the corresponding half of 2015, showing 8.1 percentage point increase over the period. It also increased by 13.68 percentage point when compared with 46.3 per cent recording in the preceding half.

It also said the local sourcing of raw materials averaged 53.14 per cent in 2016 against 48.77 per cent recorded in 2015, showing 4.37 percentage point increase over the period.

The statement stressed that the inventory of unsold finished goods in the manufacturing sector fell to N35.42 billion in the review period from N45.92 billion of the corresponding periods of 2015, indicating N10.5 billion or 22.9 per cent decline over the period.

It also declined by N19.51 billion or 35.5 per cent when compared with N54.93 billion recorded in the preceding half. Inventory of unsold manufactured goods in the manufacturing sector totalled N90.35 billion in 2016 against N94.54 billion in 2015, thus indicating N4.19 billion or 4.4 per cent decline over the period.