Manufacturers in Nigeria earned N494.2 billion from the export of goods in the fourth quarter of 2024.
Data from the foreign trade report showed that the country’s exports for the period jumped by 110 per cent when compared to N235 billion in the corresponding period of 2023 and recorded a decrease of 52.5 per cent from the preceding quarter in 2024.
A breakdown of the data showed that manufacturers’ exports for the period accounted for 24.5 per cent of the total N8.97 trillion of manufactured goods traded.
The main export commodity was Unwrought aluminum alloys exported to Japan and China worth N63 billion and N9.3 billion respectively.
By region, Africa accounted for most of the manufactured goods exports with N215.9 billion, followed by Asia with N165.9 billion and Europe with N62 billion for the period.
The data also showed that manufacturers imported manufactured goods worth N8.5 trillion, indicating a 113 per cent increase from N3.97 trillion in the fourth quarter and a 21.37 per cent rise from N6.98 trillion recorded in Q3 2024.
According to manufacturers, the high raw materials and machinery imports bill is due to exchange volatility. The country’s currency traded against the green bag during the period was 1,700/$, according to BusinessDay’s analysis.
Manufacturers import their raw materials invoiced in dollars which they must now purchase using the slumping naira.
Depending on the sector, exposure to the FX market in the Nigerian manufacturing sector averages about 40 percent, according to the Manufacturers Association of Nigeria (MAN).
But it differs from sector to sector. Sectors like pharmaceuticals and chemicals would naturally have higher FX exposure because most of their inputs are imported owing to the lack of a limited petrochemical industry in Africa’s most populous nation.
Products from inputs to machinery are imported into the country every week by manufacturers.
The fact that manufacturers are the biggest importers is, however, ironical, given that the sector should naturally be at the forefront of exporting and repatriating FX into the economy.
In the words of the Chief Executive Officer for the Centre for the Promotion of Private Enterprise, Muda Yusuf, “The exchange rate volatility has been raising production costs for manufacturers because of their dependence on imported raw materials.”
Speaking at the 2024 MAN’s Annual General Meeting (AGM), Managing Director of Coleman Wires and Cables Industries Ltd., George Onafowokan, said foreign exchange volatility is negatively impacting the country’s manufacturing as the cost of importing essential raw materials and machinery has tripled.
Onafowokan said the foreign exchange scarcity has greatly hindered manufacturing sector operations, hence affecting business sustainability.