Cost of Imported Materials Surge by 118% in 2024 – MAN

Manufacturers Association of Nigeria (MAN)

Cost of Imported Materials Surge by 118% in 2024 – MAN

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The cost of imported raw materials surged by 118 per cent to N6.64 trillion in 2024 alone due to the depreciation of the exchange rate, Manufacturers Association of Nigeria (MAN) has disclosed.

The Director General of MAN, Segun Ajayi-Kadir, disclosed this while delivering a keynote address at the BusinessDay Manufacturing Conference in Lagos.

Ajayi-Kadir highlighted how unstable exchange rate, inadequate power supply/ high cost of energy, high inflation, insecurity, multiplicity of regulatory agencies and high regulation costs, high interest rate, among others are constraining the manufacturing sector in Nigeria.

He said, “Credible data revealed that last year alone, the exchange rate depreciated by 53% and the cost of imported raw materials surged by 118% to N6.64 trillion.

“In the same year, documented forex losses of manufacturers within MAN increased from N983 billion in 2023 to N1.62 trillion due to Naira depreciation as well as the non-settlement of the $2.4 billion worth of Forex forward contract by the CBN.”

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He said as of 2023, 767 manufacturing companies have shut down operations and over 18,000 jobs were lost in 2024 alone due to the hostile business environment.

“This is evident in the country’s ranking of 97th in the Global Competitive Industrial Performance Index; an uninspiring 44 places below South Africa,” he said.

The DG said it is evident that the business-operating environment is constraining Nigeria’s industrialisation and urgent action is required to address these challenges and unlock the growth potential of the manufacturing sector.

According to him, the current administration’s commendable efforts at improving production capacity and reforming the operating environment need to be accelerated and effectively coordinated.

Speaking on high burden of multiple charges and checkpoints around major transportation and trade corridors, he said, “For example, while it has been noted that about 53 checkpoints exist between Mile 2 and Seme border, the 20km Seme to Badagry route has a total of 34 checkpoints. This makes movement of goods and trading difficult.”

He, therefore, called for effective engagement and inclusion in policy processes; gazette of the “Nigeria First Policy”, provision of a stable and predictable policy environment and urgently improve infrastructure and logistics networks.