Nigeria’s manufacturing sector is turning inward as naira devaluation and foreign exchange scarcity reshape supply chains across the country.
According to a new Financial Times report on Sunday, volatility in the forex market is forcing companies to reduce their reliance on the dollar by embracing local raw material sourcing.
Firms that once depended heavily on imports are now shifting to domestic supply chains to survive. The move follows the Central Bank of Nigeria’s decision to float the naira — part of President Bola Tinubu’s economic reforms aimed at reviving growth and attracting investors. The policy, however, triggered unprecedented volatility in the currency market.
With manufacturers contributing about nine per cent of Nigeria’s GDP, the sector has been hit hard by the naira’s sharp depreciation and reduced dollar inflows. Many companies have been unable to afford imported inputs, leading to widespread disruptions.
The Manufacturers Association of Nigeria (MAN) revealed that about 800 companies shut down operations in 2024 alone due to soaring input costs and restricted access to foreign exchange.
Industry analysts believe the forced pivot to local sourcing may drive innovation and strengthen domestic industries, but warn that without stable policies and infrastructure support, recovery will remain slow.
