Nigeria’s Manufacturing Export Sector Revenue Plunge by 166% to N778.4 Billion, Blamed on Infrastructure Constraints


Nigeria’s Manufacturing Export Sector Struggles Amidst Declining Revenue, Infrastructure Challenges

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The manufacturing export sector in Nigeria is grappling with significant challenges, leading to a sharp decline in revenue over recent years. According to reports, revenue from manufacturing exports plummeted by 166 per cent to N778.4 billion from its peak of N2.1 trillion in 2019.

Operators in the sector have attributed this downturn to a myriad of factors, with poor infrastructure and logistical constraints topping the list. These challenges have exacerbated the operating environment, making it increasingly difficult for businesses to thrive.

The downward trend in manufacturing export revenue has been evident since 2019, with a notable decline to N960.7 billion in 2020, attributed to the impact of COVID-19. While there was a slight recovery in 2021, reaching N1.15 trillion, the sector experienced another substantial drop to N781.1 billion in 2022, followed by a significant decrease to N778.4 billion in 2023.

During the same period, the share of manufacturing exports to non-oil exports also witnessed a decline, dropping to 24.8 per cent in 2023 from 82.4 per cent in 2019.

The World Bank’s Africa Pulse publication has specifically pointed to poor infrastructure and inefficient logistics as major contributors to Nigeria’s dwindling foreign trade. According to the report, trade costs in Nigeria and Ethiopia are four to five times higher than those in the United States, primarily due to insecurity, high transportation costs, topography, and inadequate road infrastructure.

The consequences of these challenges extend beyond revenue decline, with African producers showing a preference for selling locally rather than exporting their goods. Additionally, statistics from the World Trade Organisation (WTO) reveal a stark contrast between Nigeria’s manufacturing export value ($3 billion) and South Africa’s ($46 billion) in 2022.

Manufacturers and operators in Nigeria’s export ecosystem have voiced concerns over the harsh business environment, citing increased costs of doing business and uncompetitive global market conditions. Many businesses have struggled to survive, leading to closures and the exit of several multinationals from the country.

Industry stakeholders, including the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI), have called for government intervention to address these challenges. They emphasize the need for access to affordable loans, streamlined regulatory processes, and improved infrastructure to enhance competitiveness and support export growth.

The Nigerian Export Promotion Council (NEPC) has also emphasized the importance of adhering to trade requirements for exporting products to different countries. Meanwhile, the implementation of initiatives like the National Single Window (NSW) is expected to streamline trade processes and enhance Nigeria’s foreign trade potential, according to experts.

In light of the significant economic losses attributed to import-export infractions, President Bola Tinubu has highlighted the importance of initiatives like the NSW project, which aims to simplify trade processes and reduce bureaucratic bottlenecks, ultimately facilitating seamless trade operations.

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