Nigeria’s manufacturing sector is increasingly reliant on imported raw materials, with expenditures reaching N3.53 trillion in the first half of 2025 a 19.7% increase from N2.95 trillion in the same period the previous year.
This surge underscores a significant challenge to the government’s import substitution policy, which aims to reduce dependence on foreign goods and bolster domestic production.
Key imports include sugar cane and related products for the sugar refining and confectionery industries, additives for lubricating oils, sheets for veneering, and hides and skins for leather products. These materials predominantly come from countries such as Brazil, the United States, the United Kingdom, France, China, Germany, and Tanzania. Additionally, the cement manufacturing sector has seen increased imports of gypsum, while paint producers rely heavily on imported binders and resins.
The Raw Materials Research and Development Council (RMRDC) reports that over 70% of the inputs used in Nigeria’s manufacturing sector are sourced from abroad. In 2024, raw materials imports amounted to N6.64 trillion, with a significant portion directed towards manufacturing inputs. This heavy reliance on foreign raw materials is attributed to structural weaknesses in the economy, including inadequate local processing capacity, high energy costs, and currency devaluation.
Manufacturing sector stakeholders express concern over the increasing dependence on imported raw materials, highlighting the strain on the nation’s foreign exchange resources. The Manufacturers Association of Nigeria (MAN) attributes this trend to structural weaknesses in the economy, compelling manufacturers to import essential components, even for basic products.
The Lagos Chamber of Commerce and Industry (LCCI) views this growing reliance as a failure of the import substitution policy, emphasizing the need for a strategic shift to enhance domestic production capabilities. Analysts suggest that the importation of a large percentage of Nigeria’s manufacturing inputs is aggravated by high energy costs, lack of local processing capacity, and currency devaluation.
The Centre for the Promotion of Private Enterprise (CPPE) underscores the importance of import substitution in stimulating the domestic economy, conserving foreign exchange, and creating jobs. They advocate for policies that encourage local sourcing of raw materials and investment in domestic processing industries to reduce the nation’s dependence on imported goods.