NIGERIA – A prevailing twin crisis of weakening oil prices and a raging Covid-19 pandemic has had its toll on Nigeria’s manufacturing sector forcing it into a 8.78% contraction in the second quarter of 2020, a new report by Central Bank of Nigeria has revealed.
Nigerian’s manufacturing sector which is heavily reliant on the oil industry found itself in a tight spot after weakened global oil price and depressed demand for oil led to a decline in Nigeria’s oil revenue.
The COVID-19 pandemic on the other hand, induced lockdowns which significantly affected productivity in other sectors of the economy and almost brought the economy to a standstill.
Nigeria’s telecom sector has however, remained resilient amid the COVID-19 pandemic given the surge in the demand for data usage and increase in total mobile subscribers.
Due to the COVID-19 pandemic, organizations are adjusting to digital workspace, a new normal which is expected to increase data services, and further enhances growth in the sector in the short to medium term.
The Telecoms sector according to the CBN report recorded an 18.1% increase during the second quarter, the highest quarterly rise since 2018.
According to the report, Oil refining, a component of the manufacturing sector, dipped by 67.7% (year-on-year) while transportation and storage sector contracted in real terms by 49.23% (year-on-year).
The report further revealed that the accommodation and food services subsectors contracted by 40.19% while the construction sector shrank by 31.8%.
The country’s education sector contracted by 21% as learning activity virtually crippled in all academic institutions after the government order a closure of all these institutions to curb the spread of COVID-19.
Other sectors with significant contractions include; Real Estate (21.99%), Trade (16.59%), Professional & Technical services (15.41%), other services (15.07%).
While most sectors recorded negative growth in Q2, the trend may subsist in subsequent quarters of the year as concerns about emergence of second wave of the COVID-19 pandemic may distort the recovery trajectory of critical sectors