Manufacturers lament surge in cost of imported raw materials
The Manufacturers Association of Nigeria (MAN) has said that the sporadic rise in the cost of imported raw materials has limited the competitiveness of Nigerian manufacturing exporters.
According to the MAN Quarterly Economic Report (Third Quarter 2024) this is evidenced by the significant decline in the share of manufacturing export in non-oil export from 30.24 percent in Q2 2023 to 15.11 percent in Q1 2024 before rebounding to 24.73 percent in Q2 2024.
It noted that “it is yet to retain its initial contribution to non-oil export as the share of manufactured exports in total export also dropped from 3.3 percent in Q2 2023 to 1.4 percent in Q1 2024 before rebounding to 2.48 percent in Q2 2024. However, it is yet to retain its initial contribution to total export.”
The confidence levels of operators within the sectoral groups according to the MAN Quarterly Economic Report were also heavily dampened by inflationary pressure, increase in imported products, low Government patronage and high cost of raw materials.
The report highlighted that the devaluation of the naira highly contributed to the consistent increase in the value of manufactured exports. “Manufactured exports rose from N212.14 billion in Q2 2023 to N268.79 in Q1 2024 and N480.82 billion in Q2 2024. This marked 126.7 percent increase year-on-year and 78.9 percent increase quarter-on-quarter.
“However, the cost of imported raw materials also surged consistently from N567.80 billion in Q2 2023 to N1.47 trillion in Q1 2024 and N1.48 trillion in Q2 2024.
“This shows that the net loss of the naira devaluation has been enormous for manufacturers,” the report emphasized.
