Naira Depreciation Drives 139% Surge in Manufactured Goods Imports to N5.74 Trillion

The importation of manufactured goods into Nigeria skyrocketed by 139% year-on-year (YoY) to N5.74 trillion in the first quarter of 2024 (Q1’24), up from N2.40 trillion in the same period of 2023 (Q1’23).

Stakeholders attribute this surge to the depreciation of the Naira and the competitive disadvantage faced by locally produced goods due to various constraints in the manufacturing sector.

Data from the National Bureau of Statistics (NBS) Foreign Trade in Goods report for Q1’24 indicates a consistent quarterly increase in the value of imported manufactured goods since the beginning of 2023.

For example, imported manufactured goods were valued at N2.40 trillion in Q1’23, rising to N3.02 trillion in Q2’23, N3.96 trillion in Q3’23, N3.97 trillion in Q4’23, and reaching N5.74 trillion in Q1’24. The upward trend continued monthly in Q1’24, with imports at N1.60 trillion in January, N1.79 trillion in February, and N2.35 trillion in March 2024.

According to NBS, the total value of manufactured goods traded in Q1’24 was N6.01 trillion, with imports accounting for 95.5% (N5.74 trillion) and exports making up 4.5% (N268.70 billion).

Key imported manufactured goods included ‘Machines for reception, conversion, and transmission of voice, images, or data’ from China and the United States, valued at N95.34 billion and N34.00 billion, respectively. This was followed by ‘Heat exchange units’ from the United States, valued at N91.29 billion.

Other notable imports were ‘Motorcycles and cycles fitted with an auxiliary motor, petrol fuel, capacity >50<250cc, CKD’ from India, valued at N73.59 billion, and ‘Other Herbicides, anti-sprouting products, and plant growth regulators’ from China, valued at N97.89 billion.

Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), attributed the increase to the high production costs faced by Nigerian manufacturers, which make it difficult to compete internationally. He stated, “Nigerian manufacturers are burdened with high production costs, which ultimately drive up the prices of manufactured goods. The export base should be robust enough to support the floating exchange rate, but we need a strong economic foundation to achieve this. The government should investigate why manufacturers cannot export as expected.”

Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), also commented on the rise in import figures, attributing it mainly to the naira devaluation. “I think it is because of the naira depreciation. If you are importing something that was $1 million when the exchange rate was N450 per dollar, now you are importing products worth $1 million, and the exchange rate is N1,500 per dollar,” he explained.

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