The Manufacturers Association of Nigeria has decried the high interest rates by banks as manufacturing exports crashed from the last peak of N1.04tn in the third quarter of 2024 to N294.43bn in Q1 2025, representing a N746.38bn plunge.
Foreign trade data from the National Bureau of Statistics show that manufacturing export value in Q1 2025 was N294.43bn, indicating a 40.43 per cent decline from N494.22bn recorded in the preceding quarter.
In a phone interview with The PUNCH, the Director-General of MAN, Segun Ajayi-Kadir, noted that the sector’s performance had slumped due to policy fallouts, especially the 27.5 per cent monetary policy rate, which has diminished the sector’s viability.
He said, “The issue of the government’s monetary policy has tended to impact the assets to finance the manufacturers, and it has not relented. It has only been mandated to a sustained interest rate, which at the last count is 27.5 per cent, which is extremely high for manufacturing borrowing. That has persisted.”
Ajayi-Kadir noted that manufacturers have responded positively to the stabilisation of inflation and the moderation in the foreign rate escalation, but insisted that it remains high, leading to a “situation where manufacturing performance has not yielded any significant growth.”
Recent data show manufacturers’ challenges persist, despite the country’s N5.17tn trade surplus. Whereas manufacturing export performance improved year-on-year, growing by 9.58 per cent from N268.70bn recorded in Q1 2024, the sector has continued on a downward trend since it dropped 52.48 per cent in Q4 2024.
Notably, in a May statement, MAN’s DG decried the manufacturing sector’s performance as “sub-optimal.” He asserted that manufacturing has remained “lacklustre due to numerous familiar binding constraints like unstable exchange rate, inadequate power supply/ high cost of energy, high inflation, insecurity, multiplicity of regulatory agencies and high regulation costs, high interest rate and poor access to credit, deficient infrastructure, high logistics cost, unfavourable trade policies and low patronage.
He mourned the sector’s low indices in job creation and business sustainability, stating, “As of 2023, 767 manufacturing companies have shut down operations, and over 18,000 jobs were lost in 2024 alone due to the hostile business environment.”
NBS’ Q1 2025 Foreign Trade in Goods Statistics statement showed that Nigeria’s total exports in Q1 2025 grew by 7.42 per cent to N20.59tn from N19.17tn in Q1 2024. Quarter-on-quarter, the country’s exports also grew by 2.92 per cent compared to N20.01bn recorded in Q4 2024.
Meanwhile, out of the total export value of N20.59tn, non-oil exports accounted for N3.17tn, reflecting 15.38 per cent of total exports. The Q1 2025 figure indicated a 1.18 per cent improvement from the Q4 2024 performance of non-oil products of N2.84tn or 14.20 per cent of total exports.
The NBS reported that the value of imported manufactured goods was N7.51tn, reflecting an 11.35 per cent decrease from N8.47tn recorded in Q4 2024. However, year-on-year, the value of imported manufactured goods grew by 30.90 per cent from N5.74tn.
Consequently, the value of manufactured goods traded in Q1 2025 was N7.80tn, representing 21.67 per cent of total trade. The sector recorded a 2.83 per cent drop compared to its performance of N8.97tn as value of manufactured goods trade in Q4 2024, representing 24.50 per cent of total trade.
According to the NBS, Nigeria’s main export commodity was unwrought aluminium alloys, exported to Japan and China, worth N33.73bn and N4.25bn respectively. It is followed by dredgers valued at N37.23bn exported to Spain, and cathodes and sections of cathodes exported to Japan and South Korea, worth N11.34bn and N8.59bn respectively.
It read: “The data revealed that manufactured goods were mainly exported to Asia, valued at N103.34bn, followed by exports to Africa at N83.13bn and to Europe at N75.71bn.
Imported manufactured goods were mainly motorcycles and cycles fitted with auxiliary motor, petrol fuel, capacity >50<250cc, and Completely Knocked-Downs imported from India valued at N146.11bn. It added that, “This was followed by machines for reception, conversion and transmission of voice, images or data from China and the United States with N120.15bn and N12.06bn respectively.
“Other manufactured goods imported were polypropylene from Saudi Arabia with N83.31bn and other herbicides, antisprouting products, and plants imported from China and India valued at N132.81bn and N2.71bn respectively.”