The National Bureau of Statistics (NBS) has revealed a significant surge in raw material imports into Nigeria, reaching N3 trillion in 2023, marking a 25% increase compared to the previous year.
Data from the Foreign Trade Statistics published by the NBS highlighted key imported raw materials, including cane sugar, lubricating oils for further processing, milk preparations with vegetable fats and oils, and various odoriferous substances, among others.
Conversely, Nigeria’s raw material exports stood at N1.8 trillion during the same period, resulting in a trade balance deficit of N3.6 trillion.
Commenting on this trend, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, attributed the rise in raw material imports to the depreciation of the naira. He explained that while import volumes might not have increased significantly in dollar terms, the depreciation of the naira amplified the import value when converted.
Manufacturers have long voiced concerns about the country’s heavy reliance on imported raw materials, which has hindered the growth of the local manufacturing sector. Mansur Ahmed, the immediate past President of the Manufacturers Association of Nigeria (MAN), emphasized the need for a shift towards backward integration and import substitution to strengthen the sector.
Ahmed urged for a concerted effort through public-private partnerships to incentivize local sourcing of raw materials and reduce dependency on imports. This sentiment aligns with MAN’s recent statement expressing concerns over limited access to credit following the Central Bank of Nigeria’s hike in the Monetary Policy Rate, which could hamper efforts in backward integration and innovation crucial for industrial growth.
MAN advocated for policies that encourage domestic production and reduce reliance on imported goods, emphasizing the importance of incentivizing investment in local sourcing and backward integration to alleviate pressure on foreign exchange reserves.
