Manufacturers spent N1.88tn on raw materials import in nine months, foreign trade reports of the National Bureau of Statistics have shown.
The Q1-Q3 foreign trade reports indicated that manufacturers imported raw materials worth N1.88 bn between January and September 2022, a 22.36 per cent decline from the N2.43bn they spent in the corresponding period in the previous year.
The dip was on the back of forex scarcity in the country which has made many firms source their raw materials locally and those who could not get their inputs in the country had to stop production.
Some manufacturers lamented the difficulty in accessing foreign exchange at the parallel market due to Central Bank’s refusal to allocate forex to bureau de change operators.
They claimed may be forced out of business by the current difficulty they grappling with sourcing raw materials.
The Chief Executive Officer of Coleman Technical Industries, George Onafowokan, said the weakness of the naira, particularly in the parallel market, where a majority of manufacturers source foreign exchange, has greatly disrupted production activities.
Onafowokan expressed optimism that the price hikes which followed the naira’s devaluation would fizzle out if the currency maintained its current momentum.
He said, “The volatility which caused a 36 per cent increase in one week or so was not to anybody’s benefit. It distorted the markets. Manufacturers kept repositioning, and eventually, the whole manufacturing sector almost went into comatose. Some companies had to stop selling and production, because there was no way they could replace their stock.”
He said manufacturers were dealing with the dictates of the black market, which was not healthy for the economy.