Paul Alaje, chief economist at SPM Professionals, has said the stability needed in Nigeria’s foreign exchange market hinges upon the actions and skills of local manufacturers.
He said this at a recent public lecture in Lagos, organised by the Ikeja Branch of the Manufacturers Association of Nigeria (MAN), marking their 56th Annual General Meeting.
“Manufacturers are the solutions to the stability we’re looking for in our FX market,” Alaje said.
“When you look at our import pattern as published from time to time by the National Bureau of Statistics, over 90 percent of all imports have manufacturing inputs. We import petrol for example, because we have a manufacturing issue. This is the same for processed foods or anything we import the most.
“If the government will pay important attention to manufacturers and listen to them, they’d have solved at least 40-50 percent of our economic challenges.”
Alaje emphasised that bolstering local manufacturing capabilities holds the promise of reducing dependency on imports and ultimately stabilising the foreign exchange market.
Nigeria has long been recognised as a net importer, relying significantly on imported goods to meet its domestic demands. This dependency on foreign products has increased the pressure on Nigeria’s currency reserves.
Africa’s largest economy has struggled to get to grips with chronic dollar shortages on the official market, where trading volumes have steadily declined, causing the naira to slump to a record low against the dollar.
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There is a need to focus on value addition and local sourcing in order to reduce reliance on imported raw materials, and improve the general competitiveness of Nigerian products globally, Alaje said in his lecture.
“Promoting the use of products made in Nigeria can contribute to the gross domestic product of the country and even create jobs for young people by championing local content through the use of technology and competitiveness.”
In his welcome remarks, Robert Ugbaja, MAN chairman of Ikeja Branch, emphasised the pivotal role of embracing digital transformation, investing in research, and prioritising innovation at all levels, for manufacturers to thrive in today’s volatile, uncertain, complex, and ambiguous economy.
Stakeholders who attended the lecture concurred that if manufacturers do not get the support that they need, our future will be owned by foreigners.
Read also: Why naira fell sharply across FX markets
Manufacturers were portrayed as pivotal solutions rather than mere players in this narrative, with the consensus being that their strength, innovation, and capacity to meet local demand are vital elements in determining the country’s financial stability.
Folasade Ambrose Medebem, representing Babajide Sanwo-Olu, Lagos State governor, said: “It is on record that the Nigerian manufacturing sector has faced, and is still facing various challenges including infrastructural deficit, policy inconsistencies, and global economic fluctuations. Despite these challenges, there has been a resilient and commendable effort by MAN and its members in driving industrial growth.”
Commending the efforts of manufacturers in the country, Sanwo-Olu said Nigeria’s manufacturing sector contributed approximately nine percent to the national GDP in the past few years.
