Nigeria’s manufacturing sector is increasingly adopting local sourcing manufacturing strategies to reduce reliance on imported raw materials as rising production costs continue to threaten competitiveness in both domestic and regional markets. Industry leaders, however, say greater investment in local inputs alone will not deliver sustainable growth unless government addresses high financing costs, inadequate infrastructure, unreliable electricity, poor logistics and limited support for local raw material development.
Speaking during a television interview, Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, said manufacturers are investing more in local sourcing manufacturing and value addition to reduce exposure to imported raw materials.
He explained that although the approach is helping businesses manage supply risks, Nigeria’s current exchange rate remains too high to support competitive industrial production. Ajayi-Kadir warned that while the African Continental Free Trade Area presents significant opportunities for Nigerian manufacturers to expand into African markets, local businesses could struggle against competitors operating in countries with lower production costs if longstanding structural challenges remain unresolved.
He identified affordable financing, efficient transportation and logistics, reliable electricity supply, improved infrastructure, tax efficiency and competitive production inputs as essential factors required for Nigerian manufacturers to compete successfully across the continent.
Regional General Manager of Bel Papyrus Limited, Charbel Kairouz, said manufacturers continue to face foreign exchange constraints when importing critical raw materials, while unstable electricity supply significantly increases operating expenses. According to him, expanding the availability of locally produced industrial raw materials would reduce costs, shorten supply chains and improve operational efficiency.
“Local raw materials, with stable pricing, will allow companies to save costs, reduce delays and overcome major supply-chain challenges,” Kairouz said.
Similarly, the Managing Director of Colexa Biosensor Ltd called for government policies that prioritise domestic manufacturing as a central component of Nigeria’s industrial development strategy. The company stressed that while imports remain necessary, consistent policy implementation should gradually shift the economy towards greater local production.
Director-General of the Raw Materials Research and Development Council, Nnanyelugo Ike-Muonso, disclosed that more than 70 percent of manufacturing inputs used in Nigeria are imported. He described the situation as a major structural weakness that limits manufacturing’s contribution to economic growth, job creation and industrial development while increasing production costs through exchange rate volatility.
Ike-Muonso said Nigeria should target a 60 percent reduction in foreign raw material dependence over the next five years to strengthen its industrial base. He added that manufacturers investing in research, development and utilisation of local raw materials could soon benefit from lower tax obligations as part of government efforts to encourage private sector investment.
According to him, expanding local sourcing manufacturing, encouraging value addition through technology adoption, developing industrial clusters around raw material zones, strengthening research partnerships and improving infrastructure financing will be critical to positioning Nigeria as a leading industrial economy in Africa.
