N10tn manufacturing trade deficit recorded in 2022 – Report

The value of manufactured goods imported into the country in 2022 stood at N11tn, leaving a N10.2tn difference when compared with its import component, which stood at N781bn.

This is according to the Foreign Trade Statistics report published by the National Bureau of Statistics.

The report showed that the import bill for manufactured goods in the first quarter of 2022 was N2.9tn and N2.7tn in the second quarter. In the third quarter, N2.8tn was spent on manufactured goods imports, while it gulped N2.4tn in the fourth quarter.

On the other hand, Nigeria could only manage to export manufactured goods worth N219bn in the first quarter of the year under review. This was followed by N119bn in the second quarter. The third and fourth quarters of 2022 recorded exports of manufactured goods worth N131.4bn and N311bn respectively.

The wide gap between imports and exports of manufactured goods comes amid several efforts by the Federal Government to promote local production in the country through its backward integration policy.

To this end, the Federal Government instructed the Central Bank of Nigeria to limit the foreign exchange made available to manufacturers in order to discourage indiscriminately importation of goods that could otherwise be produced in-country.

Speaking with The PUNCH, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the backward integration policy would take a long time to materialise. He noted that most manufacturing firms in the country were yet to key into the idea.

He said, “Backward integration will take a long time to reduce that gap. A lot of companies are not involved in backward integration. It is a select number of companies that are actively involved in backward integration.

“A lot of the rest are just involved in importing their raw materials. In some areas, we cannot backward integrate because we do not have the raw materials or the technology to do it.

If you are manufacturing a car in Nigeria, you cannot backward integrate to start building engines or even producing tires. You more or less still import most of the components and just put them together.”

Idahosa further noted that even advanced economies such as Japan and China record huge import bills, but also understand the value of placing emphasis on their areas of strength with regard to production.