30 Sep

Daily Watch – IMF warns of slowing growth, manufacturers cry out over steel

  • Growth in Nigeria, and other developing economies that are primarily commodity exporting, could slow further over the next few years, the IMF says in its forthcoming 2015 World Economic Outlook. The Fund suggests that the recent decline in commodity prices could shave off one percentage point annually from the growth rate of commodity exporters over 2015-17. But in exporters of energy commodities like Nigeria, the drag could be larger—about 2¼ percentage points on average. With the slowdown being more of a structural phenomenon rather than a cyclical one, the Fund says that policy makers must go beyond demand-side measures and tackle structural reforms to improve human capital, increase investment and, ultimately, unleash higher productivity growth.
  • Nigerian can maker GZ Industries Ltd. plans to expand into South Africa with the construction of a 1 billion rand ($71 million) factory, becoming the second beverage can maker after Nampak Ltd. to have operations in the country. The company agreed to a partnership with local packaging maker Golden Era Group and will build a plant in Johannesburg with annual capacity of 1.2 billion cans, Agbara, Nigeria-based GZI said on Tuesday. The factory will start operations in the second quarter of next year and supply other southern African countries.
  • Manufacturing sector stakeholders are calling on the government to urgently intervene in the steel sector to avert an imminent collapse. According to them, efforts of the government to diversify the economy will not yield the expected result if the steel industry is allowed to collapse like the textile sector. Private steel makers say that they are operating below 30 percent capacity utilization, and are overburdened with high interest costs, hence, will need an intervention fund at low interest rates, similar to the agric intervention fund.