Naira Depreciation Escalates Manufactured Goods Imports by 139% to N5.74 Trillion

The importation of manufactured goods into Nigeria has seen an unprecedented rise of 139% year-on-year, reaching N5.74 trillion in the first quarter of 2024 (Q1’24), up from N2.40 trillion in the same period of 2023 (Q1’23).

This sharp increase has been attributed to the depreciation of the Naira and the competitive disadvantages faced by local industries, according to stakeholders.

Data from the National Bureau of Statistics (NBS) Foreign Trade in Goods report for Q1’24 reveals a steady quarterly increase in the value of imported manufactured goods since the beginning of 2023. Specifically, imports climbed from N2.40 trillion in Q1’23 to N3.02 trillion in Q2’23, N3.96 trillion in Q3’23, N3.97 trillion in Q4’23, and finally to N5.74 trillion in Q1’24.

The monthly breakdown for Q1’24 shows that imports amounted to N1.60 trillion in January, N1.79 trillion in February, and N2.35 trillion in March.

The NBS report highlights that the total value of manufactured goods traded in Q1’24 was N6.01 trillion, with imports constituting 95.5% (N5.74 trillion) and exports making up 4.5% (N268.70 billion).

Key imports 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. ‘Heat exchange units’ from the United States accounted for N91.29 billion. Other notable imports were ‘Motorcycles and cycles fitted with an auxiliary motor, petrol fuel, capacity >50<250cc, CKD’ from India at N73.59 billion and ‘Other Herbicides, anti-sprouting products and plant growth regulators’ from China at N97.89 billion.

Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), attributed the surge in imports to the high production costs faced by local manufacturers, which impede their ability to compete globally. “Nigerian manufacturers are saddled with high production costs, which ultimately push up the prices of manufactured goods,” Meshioye said. He stressed the need for a robust economic base to support the floating exchange rate, which could enhance the export capabilities of local manufacturers.

Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), also pointed to the devaluation of the Naira as a significant factor in the rising import figures. “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,” Yusuf explained.