Manufactured Imports Rise To N40.94trn
Between January 2017 and March 2021, Nigeria spent N40.94tn on the importation of manufactured goods.
It earned only N4.22tn on the export of manufactured goods within the same period.
These are according to data obtained from the Foreign Trade report of the National Bureau of Statistics.
In the review period, total value of imports was N66.43tn and total value of exports was N67.30tn. Manufactured goods dominated the import bill but contributed little to the export bill of the nation.
Nigeria’s exports were dominated by crude oil according to statistics obtained from the NBS. In the review period, the nation exported N49.31tn worth of crude oil compared to manufactured goods that only earned the nation N4.22tn.
In 2017, Nigeria spent N4.57tn on manufactured imports, and earned N285.23bn on manufactured exports.
Manufactured goods imported by the country included milk and cream in powder specially made for infants, used vehicles, and motorcycles and cycles amongst others.
The imports came mainly from Germany, France, United States, the Netherlands, and China, amongst others. Nigeria exported manufactured goods such as vessels and other floating structures, cigarettes containing tobacco, and fermented cocoa beans.
Nigeria exported to the Netherlands, Malaysia, and Indonesia, amongst others.
In 2018, Nigeria’s manufactured goods import bill rose to N7.19tn, while its export bill was N575.8bn.
The export bill had items such as vessels and other floating structures, and cigarettes containing tobacco. Countries Nigeria exported to within the year included China, Netherlands, and Ghana. Import bill for the year had items such as used vehicles, milk and cream in powder, etc.
In 2019, Nigeria’s manufactured goods import bill shot pass N11.94tn, while the export bill stood at N2.07tn. Manufactured trade deficit was in excess of N9tn during the period.
Goods in the export bill comprised vessels and other floating structures, floating and submersible drilling platforms to countries such as Ghana, Germany and Cameroon.
Goods imported into the country included used vehicles, and motorcycles from the United States, India, and China.
In 2020, import bill ballooned to N12.71tn while export bill dropped below N1tn to N960.7bn.
Manufactured trade deficit was highest in 2020 with a deficit in excess of N11tn.
Nigeria exported N700.48bn worth of manufactured goods to other African countries; N185bn to European countries; and N42.2bn to Asian countries.
In the third quarter of the year, Nigeria spent N5.54tn importing manufactured goods from Asia. In the last quarter of 2020, Nigeria spent N539.4bn importing vaccines and antibiotics from Denmark, Singapore, India, Belgium, the Netherlands, and India.
In Q1, 2021, import bill for manufactured goods was N4.53tn, which dwarfed any quarter in review. Export bill was N250.4bn, leaving a manufactured trade deficit of N4.28tn.
Nigeria’s antibiotics importation for the quarter was N372.5bn. Nigeria imported majorly from China, India, and the Netherlands.
Segun Ajayi-Kadir, the director-general of the Manufacturers Association of Nigeria, explained to one of our correspondents that manufacturing, being a cost-intensive industry coupled with local constraints, made it hard for the country to gain a comparative advantage.
He stated that though the quality of manufactured products in the country were unarguably of a high standard, the operating environment in the country such as infrastructural deficiency, uncomplimentary macro-economic indices and other production constraints put the manufacturing sector’s exports in a disadvantaged position.
He suggested reduction of corporate income taxes as a viable solution to give the manufactured goods in the country a chance to compete.
Ajayi-Kadir said, “It is a known fact that lower taxation encourages investment. It will enable investors to earn more from and help the profitability of existing industries and improve their working capital. MAN has been advocating for this over the years.”
He said manufacturing should be prioritised for access to forex, adding that there should be increased efforts at creating a friendlier operating environment.
He urged the government to deliberately support the productive sector strategically, set priorities along the line of improved infrastructure, competitiveness and stronger industrial linkages.
The Chairman, Export Group of the Lagos Chamber of Commerce and Industry, Bosun Solarin, said that there was an urgent need to improve packaging and labelling, which were preventing goods from moving out.
She stated, “Many of our products are not properly packaged and labelled. The quality is good but they require third-party certifications like HACCP, US ORGANIC and others. These certifications are expensive and mostly out of reach to many entrepreneurs.
“Government should be able to help here by subsidising the cost. Funding is also a major challenge, the interest rates and tenor are mostly unfriendly.
“There are also operational challenges but we have seen the Bank of Industry and the Development Bank of Nigeria provide development funds for entrepreneurs to finance their production.
“Packaging and labelling must be attractive. That is what draws people to your products on the shelf. Having the right knowledge is also very important.
“We advise that entrepreneurs join Business Support Organisations like the LCCI to be abreast of opportunities and the required training needed to succeed in business.”
A consultant to the Economic Community of West African States, Prof. Jonathan Aremu, said at a recent Annual General Meeting of the International Chamber of Commerce Nigeria that the fortunes of Nigeria’s manufactured goods could still dwindle if the right steps were not taken.
He said it was important for the National Assembly to move faster to ratify the African Continental Free Trade Agreement.
Aremu, who was also a member of the technical working group that drafted the agreement, said, “If NASS does not pass it, there will be problem because Nigeria is a member of ECOWAS and once a product from Morocco or South Africa enters the Republic of Benin, under ECOWAS Trade Liberalisation Scheme protocol, the product will come to Nigeria and compete with our products here.
“Nigeria needs to work quickly to be part of this process so that our products can have access to other countries. Nigeria has a large market in the African economy that companies in Egypt, RSA are eyeing, because they produce at lower costs.
“Right now, because you are not part of their market, you cannot go there, but they can use their accreditation in ECOWAS to penetrate here. We will be the net losers if this does not move.
“I am more concerned about trade in services than trading in goods because a professional can cross borders.”
He added that Nigeria should not keep saying it was not ready to join the AfCFTA.
