The Manufacturers Association of Nigeria (MAN) has released its highly anticipated Executive Summary Bi-Annual Economic Review for the second half of 2022, providing a comprehensive analysis of the manufacturing sector’s performance. The report highlights a significant increase in local raw materials sourcing and emphasizes the need for government support in the development and production of raw materials.
According to the report, the manufacturing sector witnessed a notable rise in local raw materials sourcing, reaching 53.5 percent in the second half of 2022. This marks a 3.5 percentage point increase compared to the corresponding period in 2021 and a 1.5 percentage point increase from the preceding half. The average local raw materials utilization in the sector for 2022 was recorded at 52.8 percent, reflecting a positive shift from the 51.5 percent recorded in 2021.
The increase in local raw materials utilization can be attributed to the growing difficulty in sourcing foreign exchange (forex). Manufacturers faced challenges in accessing forex, prompting them to focus more on domestic sources for their raw materials, despite the associated higher costs. This shift towards local sourcing underscores the resilience and adaptability of Nigerian manufacturers in navigating the forex scarcity.
The report emphasizes the importance of government intervention and funding in supporting the local development and production of raw materials. Specifically, the report highlights the limitations caused by the limited funding of the Raw Materials Research and Development Council (RMRDC) by the government. This has led to challenges in the development and production of Active Pharmaceutical Ingredients (APIs), which are critical components of pharmaceutical manufacturing. The absence of local production of APIs has had dire consequences for the pharmaceutical industry, particularly in the current situation of acute forex shortages. Therefore, the report urges the government to re-evaluate its role and increase funding for initiatives that promote local raw material production, ensuring the resilience and sustainability of the manufacturing sector.
The findings of the MAN Bi-Annual Economic Review provide valuable insights for policymakers, industry stakeholders, and manufacturers themselves. It underscores the need for the government to prioritize investments and policies that support local raw material development and reduce dependency on forex. By strengthening the local supply chain and enhancing domestic production capabilities, the manufacturing sector can become more self-reliant and less vulnerable to external factors.
The report serves as a call to action, urging the government to recognize the critical role it plays in supporting the manufacturing sector’s growth. By providing adequate funding and creating an enabling environment for local raw material development, the government can foster a more sustainable and resilient manufacturing industry. In turn, this will contribute to economic growth, job creation, and the overall development of Nigeria’s industrial sector.
MAN’s Executive Summary Bi-Annual Economic Review serves as a valuable resource for policymakers, economists, and industry professionals, providing them with the necessary information to make informed decisions and formulate effective strategies. It is hoped that the insights from this report will pave the way for collaborative efforts between the government and manufacturers, ensuring a vibrant and sustainable future for the Nigerian manufacturing sector.
