Nigeria’s manufacturing sector saw a remarkable surge in export earnings in the fourth quarter of 2024, generating N494.2 billion, a 110% increase compared to N235 billion during the same period in 2023. However, this strong export performance was juxtaposed by a significant 52.5% decline from the preceding quarter.
A breakdown of the data reveals that manufactured goods exports accounted for 24.5% of the total N8.97 trillion in traded manufactured goods. The main export commodities were unwrought aluminum alloys, with Japan and China being the key destinations, valued at N63 billion and N9.3 billion, respectively.
Regionally, Africa led the way with N215.9 billion in exports, followed by Asia (N165.9 billion) and Europe (N62 billion). Despite this increase in exports, manufacturers also faced an alarming rise in import bills, as the cost of raw materials and machinery surged due to the depreciation of the naira against the dollar. Manufacturers spent N8.5 trillion on imported goods in Q4 2024, marking a 113% increase from N3.97 trillion in the previous year.
The high import bill is attributed to the volatility of the exchange rate, with manufacturers heavily reliant on imported raw materials invoiced in dollars. The cost of foreign exchange, which reached 1,700 naira to the dollar during the period, has made production costs more expensive and hindered business sustainability.
Industry experts, including Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, and George Onafowokan, Managing Director of Coleman Wires and Cables, pointed to the severe impact of exchange rate fluctuations on the manufacturing sector. The scarcity of foreign exchange is particularly detrimental to sectors like pharmaceuticals and chemicals, where imports are essential due to the lack of domestic production facilities.
Despite these hurdles, Nigeria’s manufacturing sector remains a critical player in global trade, but urgent action is needed to stabilize the foreign exchange market and reduce the sector’s reliance on imports to ensure continued growth and competitiveness.
