Manufacturers have spent at least N7.9tn to import raw materials in the past three years.
According to manufacturers, the high raw materials imports bill is due to operators’ decision to source foreign exchange from the parallel market at high rates following the shortage of FX at the official market.
An analysis of the foreign trade reports of the National Bureau of Statistics also showed Nigeria was only able to export raw materials worth N1.77tn during the period, leaving a balance of trade deficit of 6.1tn.
According to the Manufacturers Association of Nigeria Bi-Annual economic report, the manufacturing sector’s local raw materials sourcing averaged 52.8 per cent as against 51.5 per cent recorded in 2021.
MAN said the increase in local raw materials utilization was due to increased difficulty in sourcing forex, which compelled manufacturers to look more inward for raw materials notwithstanding the associated huge cost.
The report partly read, “It is therefore important for the government to re-evaluate its role in local development and production of raw materials in terms of funding.
“For instance, the development and production of Active Pharmaceutical Ingredients has continuously eluded due to limited funding of the Raw Materials Research and Development Council by the Government.
“The absence of local production of APIs has been having dire consequences on pharmaceutical production, particularly in the current situation of acute shortage of forex.”
