This amount signifies a remarkable 110 percent rise from the N235 billion reported in the same quarter of 2023. However, it also reflects a 52.5 percent decrease compared to the previous quarter of 2024.
Analysis of the data indicates that exports from manufacturers constituted 24.5 percent of the total N8.97 trillion in manufactured goods exchanged during this period.
Key Export Commodities and Destinations
The primary export commodity during the period was unwrought aluminum alloys, with Japan and China being the top destinations. Exports to Japan were valued at N63 billion, while shipments to China amounted to N9.3 billion.
By region, Africa accounted for the largest share of manufactured goods exports at N215.9 billion, followed by Asia (N165.9 billion) and Europe (N62 billion).
Rising Import Bill and FX Challenges
The data also showed that manufacturers imported manufactured goods worth N8.5 trillion during the quarter, reflecting a 113 percent increase from N3.97 trillion in the fourth quarter of 2023 and a 21.37 percent rise from N6.98 trillion in Q3 2024.
Manufacturers attributed the high import bill for raw materials and machinery to exchange rate volatility. During the period, the naira traded at an average rate of N1,700 per dollar.
Manufacturers, who import raw materials invoiced in dollars, are forced to purchase these inputs using the depreciating naira. The Manufacturers Association of Nigeria (MAN) estimates that the sector’s exposure to the foreign exchange market averages about 40 percent, though this varies by sector.
Sectors such as pharmaceuticals and chemicals face higher FX exposure due to their reliance on imported inputs, a consequence of Nigeria’s underdeveloped petrochemical industry.
Impact of FX Volatility on Manufacturing
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, highlighted the challenges posed by exchange rate volatility.
“The exchange rate volatility has been raising production costs for manufacturers because of their dependence on imported raw materials,” Yusuf said.
Speaking at the 2024 MAN Annual General Meeting (AGM), George Onafowokan, Managing Director of Coleman Wires and Cables Industries Ltd, emphasized the severe impact of foreign exchange scarcity on the sector.
“Foreign exchange volatility is negatively impacting the country’s manufacturing sector, as the cost of importing essential raw materials and machinery has tripled. The scarcity of FX has greatly hindered manufacturing operations, affecting business sustainability,” Onafowokan stated.
Irony of Manufacturing Sector’s Role
Despite being a key driver of economic growth, the manufacturing sector remains one of the largest importers in Nigeria. This is seen as ironic, given that the sector should ideally be at the forefront of exporting goods and repatriating foreign exchange into the economy.