Nigeria Economy Dependent on Imported Cars, Refined Oil, Others – UN
The United Nations says Nigeria is highly dependent on the imports of goods, such as refined petrol, cars, smartphones, cereals, and pharmaceuticals.
This was disclosed by the United Nations Conference on Trade and Development in its recently released report titled, ‘The Economic Development in Africa Report 2023: The Potential of Africa to Capture Technology-intensive Global Supply Chains.’
This revelation comes as the UN opined that Africa could position itself as a geographic alternative and optimise its strategic value for future leading-edge supply chains as many companies across the world rethink their supply chain strategies to address gaps and mitigate risks,
According to the UN department, Africa needs to play a more impactful role in the global supply chain and build resilience, especially because of its large consumer market.
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The UN agency, however, noted that an important precondition for Africa to play a more impactful role in global supply chains and build resilience to the disruptive nature of shocks will be to address its supply chain vulnerabilities.
It expanded that the key barriers to logistics and supply chains on the continent include poor infrastructure (transport, warehouse and other facilities), informality, weak institutions and regulations, fragmented markets, limited sources of capital, low levels of technology and political risks.
It said, “These barriers can increase the cost of doing business and trade in many African countries, especially those that rely heavily on foreign imports of goods and services. For example, a country such as Nigeria, which has a population exceeding 200 million, is one of the biggest economies in the region (United Nations, 2022). Yet it remains highly dependent on the import of goods, such as refined petroleum oils, cars, smartphones, cereals, and pharmaceuticals, to satisfy its consumers (Observatory of Economic Complexity, 2022; Statista, 2023).”
The Secretary-General of UNCTAD, Rebeca Grynspan, said the continent’s growing population and large consumer market presents it with an advantage, as firms look for new destinations.
Grynspan said, “Africa’s growing population, increasingly large consumer markets, and expanding business opportunities are major sources of growth and prosperity for the world and key factors that position Africa as a strategic region in the drive for geographically diversified supply chains.
“Moreover, Africa’s large reserves of critical minerals that are vital for global supply chains of high technology-intensive industries can turn African economies into key suppliers of parts and components in the automotive, electronics, renewable energy, and medical devices sectors.”
The agency further revealed that many factors can influence a company’s decision to relocate parts of its supply chain to another country or region, and this includes a conducive environment for increased productivity, high-growth markets, high-profit entrepreneurship, an active and technology-oriented workforce, and a dynamic consumer base.
It noted that Nigeria experienced subdued growth in 2022, with inflation, power supply challenges, and lower-than-expected oil production affecting economic performance in the country.
