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afrol News, 15 June - Following the substantial gains made in Nigeria's industrial sector last year, it notes a small decline in the first quarter of 2002. The turned trend was to be explained by the late release of the 2002 budget, according to a new report by the Central Bank of Nigeria (CBN). Nigeria's manufacturing sector had recorded substantial improvements in 2001, with industrial capacity utilisation rising to 41 percent from its 33 percent in 2000, according to the Manufacturers Association of Nigeria (MAN). This had been achieved despite the "myriad of structural problems in the sector occasioned by the high cost of doing business in Nigeria," MAN President Charles Ugwuh was quoted by the Lagos-based 'Newswatch'. The industrial sector's positive trends in 2001 were however thwarted by a lack of government cash flow in the beginning of 2002, according to a newly released CBN report. Activities in the sector had declined by 0.6 percent during the first quarter of 2002. According to the report, this "decline was traceable to the delay in the release of the 2002 budget, which resulted in a slow-down in economic activities." Nine sectors within manufacturing had recorded a decline, including electronic equipment and vehicles - but also mass consumption sectors such as soft drinks and textiles. The report indicates that these losses will be made up for in the second quarter as the 2002 budget is now released. Consumption is thus expected to rise markedly. Having bigger consequences for state revenues, also the key petroleum sector had declined in the fist quarter of 2002. "Estimated at 172.9 million barrels, crude oil production (including condensates) which accounted for over 98 per cent of mining output, declined by 10.2 percent from the level in the last quarter of 2001," the Bank's report said. The reduction in oil production is a result of global OPEC policies to maintain a high oil price. Nigeria, which often has been accused by OPEC of producing more oil than allowed to, this year has made efforts to abide by its quota. Much of the reduced production is made up by higher oil prices. Sources: Based on CBN, press
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