The National Bureau of Statistics has said the inflation rate increased to 22.04 per cent on a year-on-year basis in March 2023. However, imports of raw materials into the country increased by 25 % to N3 trillion in 2023.
This follows the foreign trade statistics published by the National Bureau of Statistics, according to The Punch.
Cane sugar, other lubricating oils intended to be mixed further, preparations of milk containing vegetable fats and oils, and mixtures of odorous substances or sheets for veneering were among the major raw materials imported during that period.
Meanwhile, Nigeria could only export raw materials worth N1.8tn between 2022 and 2023, recording a N3.6tn balance of trade.
Commenting, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, linked the increase in raw material imports (in naira terms) to the depreciation of the naira.
He said, “I think it is because of the naira depreciation. If you were importing something that was $1m when the exchange rate was N450, now you are importing products worth $1m and the exchange rate is N1,500.
“That is three times already if you multiply it in naira. So, in dollar terms, the import may have even reduced. We have to consider that.”
Recall, that the Manufacturing Association of Nigeria had expressed concern that the resulting limited access to credit would limit backward integration, research and development, and innovation needed to enhance productivity and rapid industrial economic growth, in a statement issued in response to the recent increase in the monetary policy rate by the Central Bank of Nigeria.
It declared, “Further reduce the reliance of the country on imported products and raw materials by providing incentives for investment in backward integration and local sourcing to reduce the pressure on the dollar to the barest minimum.”
