The persistent scarcity of foreign exchange (FX) has compelled Nigerian manufacturers to increasingly source raw materials locally, according to a recent report by the Manufacturers Association of Nigeria (MAN). The report, which examined manufacturing activities during the first half of 2024 (H1 2024), highlights a growing shift toward local inputs as companies seek to navigate the challenges of limited access to FX.
Local raw material sourcing rose slightly to 56.03% in H1 2024, compared to 55.4% in the same period last year. Despite this improvement, the transition has not been uniform across subsectors. Industries like non-metallic minerals and textiles, apparel, and footwear saw declines in local sourcing, underscoring the ongoing reliance on imported materials in some areas.
Francis Meshioye, MAN President, noted that while nominal manufacturing output saw a significant 30.38% year-on-year increase to ₦5.34 trillion in H1 2024, real output fell by 1.66%, dropping to ₦1.34 trillion from ₦1.36 trillion in H1 2023. He also observed a 9.97% growth in real output compared to the second half of 2023 (H2 2023), largely attributed to base effects.
Meshioye emphasized the urgency of implementing economic reforms to address the challenges facing manufacturers. “The resilience of Nigeria’s policy framework and its economic management will determine the path forward for the manufacturing sector,” he stated.
As FX challenges persist, the shift to local sourcing may signal a positive long-term trend for reducing import dependence, though manufacturers in specific subsectors continue to grapple with unique obstacles.
