The publishing industry in Nigeria is facing a number of challenges, and some of the country’s oldest publishing houses are struggling to stay afloat.
From print media to companies and millions of schools scattered around the country, Nigeria’s demand for paper is huge. But as in many once-thriving industries, the industry is being squeezed from all sides, by rising digital innovations, declining reading culture, and rising cost of printing.
This development has led to a decline in demand for printed books, which has hurt traditional publishers.
According to findings by BusinessDay, listed publishing firms on Nigerian Exchange Limited (NGX) such as Academy Press, University Press, and Learn Africa experienced a 32.88 percent decline in profit during the first quarter of 2023.
The profit dipped from N783.8 million in the same quarter of 2022 to N559.8 million.
Rising Operating expenses
The analysis of Q1’23 financial statements showed an increase in operating expenses within the Nigerian publishing industry.
Operating expenses such as marketing, distribution, and administrative expenses, grew by an average of 14 percent across the sector. This upward trend can be attributed to factors like inflation, higher production costs, and investments in digital infrastructure.
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Operating expenses in the first quarter of 2023 amounted to N3.14 billion from N2.75 billion recorded in the same quarter of 2022.
Revenue moves at snailpace
In the first quarter of 2023, the Nigerian publishing industry recorded marginal growth in revenue of 0.25 percent to N10.14 billion from N10.11 billion recorded in the same quarter of 2022.
The industry as a whole saw a modest increase in sales compared to the same period in the previous year.
Finance cost gulps 25 percent of profit
One of the challenges faced by the Nigerian publishing industry in the first quarter of 2023 was an increase in finance costs.
Finance costs accounted for 25 percent of the industry’s overall profit. Finance costs recorded in the first quarter of 2023 amounted to N150.9 million from N119.9 million recorded in the same quarter of 2022.
The rise in finance costs can be attributed to multiple factors, including increased borrowing and rising interest rates. The industry witnessed a rise in interest rates due to continuous adjustments by the Central Bank of Nigeria.
Rising paper imports
Despite an abundance of domestic raw materials, Nigeria spent N1.63 trillion on the importation of paper and its allied products in the last five years.
Data obtained from the National Bureau of Statistics showed Nigeria’s importation of paper and its allied products grew by 25 percent to N412 billion in 2022.
Further breakdown showed Nigeria’s paper imports gobbled up N328.9 billion in 2021, N188.6 billion in 2020, N491 billion in 2019, and N214.3 billion in 2018.
The country spent N200 billion in 2017, N162 billion in 2016 and N151 billion in 2015 on the importation of paper.
The latest CEO’s Confidence Index report of the Manufacturing Association of Nigeria (MAN) showed the score of the pulp, paper, printing and publishing sector fell to 49.6 points in the fourth quarter of 2022 from 50.9 points the previous quarter.
“The score indicates a gross loss of confidence in the economy by manufacturers operating in the sectoral group,” MAN said.
Olugbemi Malomo, national president of Chartered Institute of Professional Printers of Nigeria, lamented that the heavy reliance of the major spenders like the Independent National Electoral Commission (INEC) and the Universal Basic Education Commission (UBEC) on foreign printers is killing the local printing industry.
“The Federal Government should come up with a deliberate policy that would make its big spenders like the INEC and UBEC be part of the solution to local paper production,” Malamo said. “With 60 percent of Nigeria’s population in one school or the other and over 1. 2 billion books printed annually, imagine if all these papers are sourced locally.”
