Thursday, May 13, 2021

Nigeria’s Economic Outlook Bolstered by Expanding Output, Business – Friendlier Policies

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Godwin Okafor
Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

by Godwin Okafor

In the just concluded week,  the Nigerian economic outlook was bolstered amid positive reports on results of the October PMI survey and the improvement on the country‟s Doing Business ranking among other things, Naija247news understands.

The October 2017 survey report on purchasing and supply executives from manufacturing and non-manufacturing businesses as released
by Central Bank of Nigeria showed sustained expansions in both the manufacturing and non-
manufacturing businesses.

The boost in real sector activity could be partly attributed to growing demand for goods and services on the back of improving purchasing power domestically. This, coupled with favourable ongoing economic reforms to improve the business environment, led to a strengthening of business sentiment. The reforms also include recent efforts by monetary authority at improving foreign exchange supply to end users.

According to the survey, the manufacturing composite PMI stood at 55.0 index points in October 2017 (albeit lower than 55.3 index points in September 2017). The slower
increase in manufacturing composite PMI was driven by slower expansion in production level, to 58.4 in October (58.8 in September); slower expansion in production level
to 58.4 (from 58.8); and slower increase in new orders to 52.8 (from 53.5).

However, there was slower contraction in exports at 35.5 (from 30.4); faster growth in employment to 53.1 (52.8); faster expansion in purchase of raw materials/inventories, to 56.5 (from 56.4);
while supplier delivery times shortened, to 55.5 (more than 55.4), possibly due to improved capacity at input suppliers‟. Expansion in input prices slowed to 62.7 (from 65.7) – indicative of slowing inflation – while output prices followed suit, expanded slower to 55.4
(from 58.2).

Of the sixteen manufacturing sub- sectors under survey, twelve sectors recorded expansions (less than fourteen in the preceding month) – manufacturers of „Textile, apparel, leather & footwear‟ and„ Paper products‟ recorded expansions: at 57.6 (from 51.4) and 59.8 (from 53.7) respectively; however, cement manufacturers recorded contraction, at 46.7 (from 54.1).
On the other hand, the non-manufacturing sector extended its advance as the non-manufacturing composite PMI increased to 55.3 in October 2017 (from 54.9 in September 2017). This was partly driven by expansion in business activity and incoming business to 57.5 in October (faster than 56.8 in September) and 55.7 (faster than 55.4) respectively; while work in progress expanded faster to 53.4 (from of 52.9).
In a related development, Nigeria improved on the Doing Business Ranking from169th
in 2017 to 145th in 2018.

The leap in Nigeria‟s progression in the ease of doing business was attributed to Nigeria‟s
improved efforts at facilitating the rate of starting a business by allowing electronic stamping of registration documents; increased transparency in the issuance of construction permits by publishing all relevant regulations, fee schedules and pre-application requirements on
line; and facilitation of property registration by publishing the list of documents, fee schedules,
service standards for property transactions, in troducing a specific and independent complaint mechanism, and by publishing statistics on land transfers.

Nigeria also strengthened access to credit by adopting a new law on secured transactions and establishing a modern collateral registry while also improving access to credit information by guaranteeing borrowers the legal right to inspect their credit data from the credit bureau
and providing credit scores to banks, financial institutions and borrowers.

On payment of taxes, Nigeria introduced new channels for payment of taxes and mandating taxpayers to file tax returns at the nearest Federal Inland Revenue Service (FIRS) office. Doing Business measures aspects of business regulation and their implications for firm establishment and operations

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