A total of N9.28 trillion was spent on the importation of manufactured goods into Nigeria from January to September 2020; the latest data from the National Bureau of Statistics have shown.
Manufactured goods imports into the country rose significantly in the third quarter of last year (2020) as the manufacturing sector was hard hit by the covid-19 pandemic, border closure and foreign exchange scarcity.
The sector contracted in the six months to October amid the economic fallout of the pandemic.
The manufactured goods imported into the country in Q3 were valued were valued at N3.8tn, up from N2, 78tn in Q2 and N2.66tn in Q1, according to the NBS.
Manufactured goods imports increased in value by 23.18% in Q3 compared to Q2 and 23.47% year-on-year.
The Director-General, Manufacturers Association of Nigeria, Mr. Segun Ajayi Kadir, said that 2020 was quite a bad year for manufacturing business in Nigeria.
He said the disruption caused by the covid-19 lockdown and the challenge of insecurity severely limited food production and movement of food and across the country.
The Lagos Chamber of Commerce and Industry, in its economic review for 2020, and outlook for 2021, noted that the manufacturing sector was faced with several structural challenges, with adverse impact on growth performance. It said the sector had been struggling with growth in recent years due to tough operating conditions in the local business environment and had made most industry players less competitive in the domestic and regional markets.
According to the LCCI, lingering forex crisis was perhaps the most significant challenge for the sector in 2020 as most industry players found it increasingly difficult to access forex meant for importation of critical factor inputs.
It said the reopening of the land borders should provide succor even as the kick-off of African Continental Free Trade Area serves as avenue for manufacturers to penetrate new African markets.
According to the LCCI, the low interest environment in the money market favours big manufacturing players in terms of raising cheap capital but the business environment will remain challenging for manufacturing small and medium enterprises.
It said, “In our view, credit flows to the manufacturing sector will fail to achieve desired outcome without putting in place measures to address structured bottlenecks in the ports and customs processes and other policy challenges to productivity”.
The Punch, January 8, 2021
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