By Hobnob News Business Desk
Nigeria’s manufacturing industry remains heavily dependent on imported raw materials, spending a staggering ₦3.53 trillion in the first half of 2025 — a 19.7% increase compared to the ₦2.95 trillion recorded in the same period last year, according to data from the National Bureau of Statistics (NBS).
This growing reliance on foreign inputs, analysts say, underscores the failure of Nigeria’s import substitution policy and highlights deep structural weaknesses within the economy.
70% of Manufacturing Inputs Still Imported – RMRDC
The Director-General of the Raw Materials Research and Development Council (RMRDC), Prof. Nnanyelugo Ike-Muonso, revealed that over 70% of raw materials used by Nigerian manufacturers are imported, warning that the trend threatens the country’s industrial future.
He said the situation was worsened by foreign exchange volatility, high energy costs, and limited local processing capacity — factors that have significantly increased production costs and hindered job creation.
Prof. Ike-Muonso emphasized the need for bold reforms to promote local resource utilization, urging the government to cut foreign raw material imports by at least 60% within the next five years.
He further disclosed that the federal government has granted RMRDC authority to implement tax incentives for manufacturers using locally sourced inputs, describing it as a strategic move to attract private-sector investment and stimulate innovation.
“To reposition Nigeria as an industrial powerhouse, we must reduce our dependence on foreign raw materials, incentivize local production, and strengthen industry–research collaboration,” he stated.
Structural Weakness Compels Imports – MAN
The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, said the current economic structure forces manufacturers to depend on imported raw materials and machinery, despite government’s policy drive for local content.
He lamented that over 70% of production inputs were imported in 2024, amounting to ₦6.64 trillion, adding that many manufacturers have suspended backward integration plans due to insecurity, high operational costs, and inconsistent policies.
“It’s ironic that in some cases, imported raw materials are cheaper than locally sourced ones,” he said.
“We must invest in infrastructure, technology, and research to make local materials viable and competitive.”
Ajayi-Kadir also urged the government to create industrial hubs and research-based collaborations to encourage innovation, while leveraging the African Continental Free Trade Area (AfCFTA) to source and process raw materials from within Africa.
Import Substitution Policy Has Failed – LCCI
The President of the Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, described Nigeria’s import substitution drive as a policy failure, blaming poor implementation and lack of technological capability.
According to him, while importation of raw materials is not inherently bad, the country’s inability to offset import costs through exports makes the practice unsustainable.
“In many sectors, we simply don’t have the raw materials or the technology to backwardly integrate,” Idahosa said.
“Even when assembling cars locally, we still import engines, tires, and most components.”
Why Import Substitution Still Matters – CPPE
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, emphasized that effective implementation of import substitution policies could revitalize Nigeria’s manufacturing base, reduce production costs, and diversify the economy.
“With the right incentives and policy direction, local manufacturers can integrate backwardly and depend less on imported raw materials,” Yusuf noted.
He added that Nigeria’s industrial transformation must align with smart technologies, sustainable production, and Fourth Industrial Revolution principles.
Path Forward
Despite the challenges, RMRDC’s initiatives — including its Research and Demonstration Plant Complex (RDPC) in Abuja, housing over 50 locally designed pilot plants — reflect growing efforts to promote value addition and local innovation.
In a related development, the National Assembly recently passed the RMRDC (Establishment) Amendment Bill, 2025, which mandates that no raw material shall be exported without at least 30% local processing, a move aimed at curbing the export of unprocessed commodities and boosting domestic industrial capacity.
Experts agree that without urgent reforms and strategic coordination, Nigeria risks remaining trapped in economic dependency, as its industries continue to rely heavily on foreign raw materials for production.
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