Nigeria’s manufacturing sector has demonstrated remarkable resilience, recording an impressive ₦494.2 billion in export earnings in the fourth quarter of 2024. This represents a massive 110.3% increase from ₦234.96 billion in Q4 2023, highlighting a significant improvement in industrial output and market reach. However, the sector also experienced a seasonal downturn, with a 52.5% decline from Q3 2024’s ₦1.04 trillion export revenue.
A Growing Yet Modest Contribution to Nigeria’s Trade
Despite the strong year-over-year growth, the manufacturing sector still holds a modest 2.47% share of Nigeria’s total exports. This remains overshadowed by the dominance of crude oil, which continues to dictate the country’s trade balance. The report underscores the need for greater diversification in Nigeria’s export portfolio to reduce over-reliance on oil revenue.
Booming Imports and Forex Challenges
The manufacturing sector’s heavy reliance on foreign raw materials and machinery is evident in the staggering ₦8.5 trillion spent on imports in Q4 2024, marking a 113% increase from ₦3.97 trillion in the same period of 2023. The rapid depreciation of the naira, which traded at ₦1,700 per dollar, further strained manufacturers, driving up costs for essential production inputs.
Foreign exchange volatility has been a persistent challenge for manufacturers. Industry leaders have raised concerns over a 40% sector-wide exposure to forex fluctuations, resulting in tripled raw material costs. The Manufacturers Association of Nigeria has repeatedly called for policy interventions to stabilize the forex market and support local production.
Key Export Products and Market Expansion
Nigeria’s top manufacturing exports in Q4 2024 included aluminium alloys, dredgers, and cathodes, with primary markets spread across Africa, Asia, and Europe. This diversification in export destinations highlights the country’s growing industrial reach, despite internal economic challenges.
Sustainability Concerns and Future Outlook
The steep 21.37% rise in quarterly import bills from ₦6.98 trillion in Q3 to ₦8.5 trillion in Q4 poses significant sustainability concerns for the sector. Industry experts, including George Onafowokan, caution that without policy reforms and improved local production incentives, manufacturers may struggle to maintain profitability in an increasingly volatile economic environment.
Conclusion: A Sector at a Crossroads
The remarkable export growth in Q4 2024 signals both opportunities and challenges for Nigeria’s manufacturing sector. While rising export earnings highlight the industry’s potential, forex instability and high import dependence remain critical barriers. Strengthening local production capabilities, stabilizing the naira, and implementing favourable trade policies will be essential to sustaining long-term growth and global competitiveness.