The Manufacturers Association of Nigeria (MAN) has revealed that the persistent rise in interest rates has resulted in manufacturers spending over N730 billion on capital expenses within the first half of the year.

According to MAN, unsold goods inventory also surged by 42.93%, climbing to N1.24 trillion compared to N869.37 billion at the end of 2023. This was disclosed by MAN’s Director General, Segun Ajayi-Kadir, in response to the Central Bank of Nigeria’s (CBN) recent hike in the Monetary Policy Rate (MPR).

Ajayi-Kadir remarked, “The decision to raise the MPR to 27.25% has significant repercussions for Nigeria’s manufacturing sector. The consistent increase in interest rates, which has now risen by 15.75 percentage points since May 2022, exacerbates the difficulties faced by the sector, particularly rising production costs against a backdrop of dwindling consumer purchasing power.”

He further explained that, during the first half of the year, manufacturers had to allocate over N730 billion to capital expenses due to the rising interest rates imposed by commercial banks. This burden stifles innovation, productivity, and overall growth.

In addition, the sector is struggling with weak consumer demand caused by decreased purchasing power, significantly impacting capacity utilization. Data from MAN’s economic review of the first half of the year shows an alarming trend: unsold finished goods inventory increased by 42.93%, reaching N1.24 trillion compared to N869.37 billion at the close of 2023. This growing stockpile reflects the immense challenges manufacturers are grappling with in a sluggish market.

Ajayi-Kadir warned that these challenges have far-reaching consequences for the Nigerian economy. As borrowing costs continue to rise, access to funds is reduced, leading to diminished production capacity and the potential closure of businesses. He noted that the ability to absorb the country’s expanding youth population into meaningful employment has drastically declined, with severe socioeconomic and security implications.

MAN expressed serious concerns about the ongoing rate hikes and urged the CBN to halt further increases, advocating instead for a balanced approach between monetary and fiscal policies to tackle inflation.

The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has decreased to N981 per litre, as reported by the Major Energy Marketers Association of Nigeria (MEMAN) on Thursday. This marks a significant drop from the previous cost of N1,130 per litre, reducing by over N140 as of September 25, 2024, largely due to the recent fall in global crude oil prices.

The cost of crude oil and foreign exchange rates are key factors determining the price of refined petroleum products, including petrol, diesel, aviation fuel, and kerosene. Brent crude, the global benchmark, averaged above $80 per barrel in August 2024 but has fluctuated between $70 and $75 per barrel since the start of September.

According to industry data from the petroleum ministry, Brent crude was priced at $71.41 per barrel on Thursday, down from $73.46 per barrel the previous day. Statistical firm Statistica highlighted that Brent averaged $80.36 per barrel in August, a decline from the previous month, influenced by decreased demand in China and expectations of increased production by OPEC.

Despite the drop in landing costs and rising petrol pump prices across Nigeria, major oil marketers have resumed importing the product. Previously, the Nigerian National Petroleum Company Limited (NNPCL) was the sole importer of petrol. However, with the pump price hike and Dangote Petroleum Refinery commencing production, the market has opened up.

On September 18, 2024, three major oil marketers were expecting the arrival of vessels carrying 141 million litres of petrol following the full deregulation of the downstream oil sector. MEMAN confirmed on Thursday that some of these vessels had already docked in Nigeria.

As Dangote’s refinery ramps up local petrol production, reducing Nigeria’s reliance on imports after more than two decades, MEMAN reported that petrol landing costs began to decline in mid-July, falling below N950 per litre by early September. Notably, this decline occurred despite the naira’s depreciation against the dollar, with landing costs calculated at N1,667.22 per dollar.

The average ex-depot price of petrol, as stated by MEMAN, ranged from N865 to N1,200 per litre in Lagos, N980 to N1,400 in Calabar, and N1,200 to N1,400 in Port Harcourt as of Wednesday. For diesel, the landing cost was N1,089 per litre, while aviation fuel stood at N1,117.34 per litre, with average ex-depot prices of N1,165 in Lagos and N1,200 to N1,300 in Calabar and Port Harcourt.

A price difference of N83 was noted between imported petrol and Dangote’s locally produced fuel, with the NNPC purchasing Dangote’s fuel at N898 per litre. Although Dangote refinery officials denied selling at this price, they have yet to provide a revised figure.

Following the Dangote refinery’s fuel sale, the NNPC raised the price of petrol from approximately N600 to between N855 and N900 per litre. The NNPC also announced regional variations in petrol prices, with rates expected to exceed N1,000 per litre in northern regions like Borno (N1,019/litre) and hover around N999.22/litre in Abuja, Sokoto, and Kano. In southern states such as Oyo and Rivers, the price will be around N960 per litre, with the lowest price of N950 in Lagos and surrounding areas.

While some marketers are still selling at N910 per litre in Lagos, prices in other regions remain significantly higher. In a media briefing, Dapo Segun, Executive Vice President of the NNPC’s Downstream division, stated that petrol pricing is now market-driven, though negotiations with Dangote refinery played a role in determining the current rates.

As Nigerians await the start of crude oil sales priced in naira on October 1, 2024, the hope remains that PMS prices will further decline.

Seven months after negotiations concluded with the approval of the new N70,000 minimum wage, the Federal Government began disbursing the updated salaries to public servants across all levels of the civil service on Thursday. This adjustment impacts over 1.2 million federal employees, with payments commencing in September.

A warrant for this month’s salary, signed by the Accountant-General of the Federation, Dr. Oluwatoyin Madein, and addressed to the Budget Office of the Federation, authorized the payment of the revised wages.

Documents from the National Income, Salaries, and Wages Commission detail the annual earnings of civil servants under the Consolidated Public Service Salary Structure (CONPSS). For instance, Grade Level 1 officers will now receive N930,000 per annum, while Grade Level 2 officers will earn N934,160. Salaries increase progressively, with Level 17 officers, typically permanent secretaries, now earning N6,918,560 annually.

Under each grade level, employees will receive specific salaries depending on their step within the grade. For example, a Grade Level 1, Step 2 officer will earn N935,585 per annum, with incremental raises up to N1,008,209 by Step 15.

The Director of Press for the Office of the Accountant-General, Bawa Mokwa, confirmed the implementation, stating, “The new minimum wage payment starts this month. Civil servants can confirm through their salary alerts. However, no information on arrears has been provided yet.”

An anonymous civil servant corroborated that some workers had already started receiving the new wages. A detailed warrant reveals that 1,236,824 employees, including those in Ministries, Departments, Agencies (MDAs), Armed Forces, Paramilitary, and educational institutions, are set to benefit.

The new minimum wage law, signed by President Bola Tinubu on July 29, 2024, followed negotiations with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). The National Salaries and Wages Commission noted that the implementation date was set for July 29, aligning with the signing of the law.

In a letter dated September 24, 2024, the Accountant-General detailed the salary breakdown for MDAs, retired heads of service, the Nigeria Police, the military, paramilitary, and tertiary institutions, noting that a 35% and 25% salary adjustment for specific staff categories will also be applied.

Additionally, the Federal University Teaching Hospital Wukari was added to the payroll in September 2024, with a staff count of 239 and a gross amount of N52.3 million.

The breakdown indicates that the monthly wage bill for the over 1.2 million employees will total N334.9 billion, resulting in an annual expenditure of approximately N4.019 trillion.

To accommodate the new wage structure, the government has increased revenue generation, which affected revenue distribution to states. During the August FAAC meeting, N200 billion was transferred to the non-savings account, bringing the total statutory allocation to N595 billion.