The depreciation of the Naira alongside foreign exchange scarcity and inflationary pressure has significantly impacted manufacturers, leading to soaring direct costs and substantial losses for many. The National Bureau of Statistics’ ‘Foreign Trade in Goods Statistics’ for Q2 2024 revealed a notable increase in the value of imported raw materials to N1.482 trillion from N567.80 billion in Q2 2023, indicating the influence of Naira depreciation on imports. Quarter-on-Quarter, the value saw a slight 0.96 percent rise from N1.467 trillion in Q1 2024.
Conversely, raw material exports in Q2 2024 reached N366.91 billion, marking a substantial 151.96 percent increase from Q2 2023 and a 4.01 percent rise from Q1 2024.
The report highlighted that in the second quarter of 2024, the raw materials sector’s total trade value was N1.848 trillion, with imports at N1.482 trillion and exports at N366.91 billion. Notably, goods like ‘Urea’ and ‘Nonmonetary Gold’ were major exports, while imports included cane sugar for sugar refinery and ‘Prep. of milk containing vegetable fats and oils.’
David Adonri, Vice Chairman of Highcap Securities, emphasized the impact of inflation, naira devaluation, and insecurity on local raw material sourcing. He highlighted that insecurity in Nigeria has hindered the domestic acquisition of raw materials and, coupled with the depreciation of the Naira, has led to increased costs for imported raw materials.
