Data from the National Bureau of Statistics reveals that in the first half of 2023, the worth of imported manufactured goods amounted to no less than $6.7 billion. The Foreign Trade Statistics reports, published by the NBS, demonstrate that the value of traded manufactured goods stood at N2.5 trillion during the same period. Manufacturers have revealed that they source roughly 95% of their forex needs from the parallel market, where the dollar exchanges at an average rate of N750. This leads to the country spending approximately $2.9 billion (N2.39 trillion) on imported manufactured goods in Q1.
However, the export component of total trade only accounted for N131 billion in Q1, indicating that over N2.3 trillion (94.7%) worth of total trade of manufactured goods were imported. The low export returns have been attributed to the non-remittance of proceeds by many exporters through banks, leading to total exports worth $285 million compared to the $6.7 billion worth of imports during the same period.
In the second quarter of the year, the worth of traded manufactured goods stood at N3.2 trillion, with the export component accounting for only 93% (N212 billion) of total trade, while imports worth N3 trillion. This means that $3.8 billion was spent on manufactured imports while $461 million was earned via exports of manufactured goods. In total, the worth of imported manufactured goods was at least $6.7 billion, while only $746 million worth of manufactured goods were exported in the first half of the year.
The major imported goods during this period included used vehicles with diesel or semi-diesel engines from the United States and United Arab Emirates, machines for reception, conversion, and transmission of voice, images, or data from China, and “Other medicament not elsewhere specified” from India.
Francis Meshioye, the President of the Manufacturers Association of Nigeria, shared with The PUNCH during an interview that Nigerian exporters encounter difficulties when trying to compete with international manufacturers. The main issue is the high production costs that local manufacturers face, which result in elevated prices for their products. This situation worth noting since it affects the competitiveness of the Nigerian manufacturing industry.
Meshioye said, “We tell our members to export more, but all these things are based on competitive advantages. If you want to export a product, it is fine, but at what cost are you going to export it? What will be your price? If the cost is astronomically high, it will be difficult to export. It is a circle.
“The export base should be good enough to support the floating exchange rate, but we need to have a good economic base to do that.”
He called on the government to look at why manufacturers cannot export as expected, adding that it could do that through a roundtable.
“They can look at those products that can generate money, and ask what the impediments to exports are. That would be fantastic. We need to boost our export base. It should be robust. The more we export, the more forex we earn. And the more forex we earn, the more we have to source our importation needs,” the MAN president remarked.
Speaking further, Meshioye implored the government to implement policies that would motivate and stimulate manufacturing.
“If we stimulate investments in manufacturing, we will definitely churn out more products. So, these products will find their way out of Nigeria legally, and we will get forex to defend the naira,” he added.
In the same vein, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said Nigeria’s over-reliance on importation had exacerbated the protracted forex crisis that had bedevilled the economy.
He added that more attention needs to be paid on import substitution and leveraging the country’s competitive advantage to boost exports and repatriate more foreign exchange earnings.
Yusuf said, “You cannot have a manufacturing sector that is so heavily import-dependent. We should have a deliberate policy to ensure that the materials that we import are produced locally. That will require active government support in those areas.”
