Nigeria’s manufacturing sector has been heavily reliant on imported raw materials for some time now, and recent statistics show that this dependence is only increasing.
According to the National Bureau of Statistics, the value of raw material imports in the third quarter of 2022 was N649.21 billion, a 23.9 percent year-on-year increase.
This rise in raw material imports is a concerning trend for the country’s economy, as it indicates that Nigeria’s manufacturing sector is not self-sufficient and lacks the ability to produce the raw materials it needs. Additionally, the decline in raw material goods exports in Q3’22 further highlights the challenges faced by the sector.
The manufacturing industry is a vital sector for any economy, as it contributes to economic growth, job creation, and innovation, Investors King stated. However, relying on imported raw materials can make the sector vulnerable to external shocks, such as price fluctuations and supply chain disruptions.
To address this issue, there is a need for the Nigerian government to implement policies and incentives that will encourage local production of raw materials. This could include tax breaks, subsidies, and investment in research and development to increase local production capacity.
Furthermore, the government could support the development of backward integration by encouraging local businesses to expand their operations upstream in the supply chain to produce the raw materials they need. This would create jobs and reduce the country’s dependence on imported raw materials.
The continued reliance of Nigeria’s manufacturing sector on imported raw materials is a concerning trend that needs urgent attention. To achieve sustainable economic growth and development, the government must take concrete steps to support local production of raw materials and reduce the sector’s dependence on imports.