The value of raw materials imported into Nigeria surged by 160.9 percent year-on-year in the second quarter of 2024 (Q2’24), rising from N567.80 billion in Q2’23 to N1.482 trillion.
This increase comes despite manufacturers’ efforts at backward integration to reduce production costs, particularly foreign exchange-related expenses.
According to the Foreign Trade in Goods Statistics report by the National Bureau of Statistics (NBS), the rise in imports is largely attributed to the depreciation of the Naira, foreign exchange scarcity, and persistent inflationary pressure. On a quarter-on-quarter (QoQ) basis, imports grew marginally by 0.96 percent from N1.467 trillion in Q1’24.
The report also revealed that raw material exports in Q2’24 increased to N366.91 billion, marking a 151.96 percent rise from N145.62 billion in Q2’23 and a 4.01 percent increase from N352.75 billion in Q1’24.
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Major raw material exports included urea solutions exported to Brazil (N103.56 billion) and non-monetary gold to Switzerland (N47.45 billion).
Key imported materials during the period included cane sugar from Brazil, valued at N188.67 billion, powdered milk from Ireland (N21.35 billion), and glutamic acid from China (N41.93 billion).
Commenting on the situation, David Adonri, Vice Chairman of Highcap Securities, highlighted that insecurity is also a significant factor affecting local raw material sourcing.
He stated, “Nigeria’s economy has been grappling with cost-push inflation for several years due to insecurity crippling domestic raw material sourcing, coupled with the depreciation of the Naira making imports increasingly expensive.”
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