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The Manufacturers Association of Nigeria (MAN) said utilisation of local raw materials in the country has steadily increased over the past three years, hitting 63.21 percent in 2017, due to increasing government support for backward integration.

President of MAN, Dr. Frank Jacobs, disclosed this to newsmen while commenting on the first quarter, 2018 (Q1’18) Foreign Trade Statistics released by the National Bureau of Statistics (NBS) last week.

He stated: “Government took the right step by adopting resource-based industrialization which aims at developing raw-materials locally for further utilization by domestic industries and strengthened support for backward integration. The result of these steps today was that the manufacturing sector is now able to increase the local raw materials utilization.

“A survey conducted by MAN shows that local raw-materials utilization in the manufacturing sector was 40.77% in 2015; increased to 53.14% in 2016; and further to 63.21% in 2017.

“The renewed attention to resource-based industrialization and backward integration polices complemented the CBN intervention in the official forex market that began in February 2017 and the introduction of the Investor & Exporter (I&E) Forex Window leading to relative ease of forex sourcing to support business activities in the country, particularly since 2017.”

Jacobs however said that the increase in the value of raw material imports in the NBS report lends credence to the recorded growth in the manufacturing sector.

Meanwhile, the MAN President has faulted the NBS report on manufacturing sector export performance for Q1’18, contending that the figure for actual export of manufactured goods in Q1’18 is N45.39 billion as against N434.37 billion reported by NBS.

He further said that the report on manufacturing sector export performance for Q1’18 appears to be ambiguous. Jacobs explained: “A cursory look at the NBS Trade Summary report shows that manufacturing export in Q1’18 actually declined when compared with Q1 and Q4 of 2017. According to the report, export of manufactured goods was N64.17 billion in Q1’17 and N55.40 billion in Q4’17; and N434.37 billion in Q1’18. “But, a major component of the N434.37 billion of Q1’18 was a re-export of N388.98 billion captured in the report under ‘Vehicles, aircraft and parts thereof.’

“So, if the re-export figure is deducted from the reported N434.37 billion, we have N45.39 billion which may represent the actual export of manufactured goods in the period. This figure is less than the export performance of the sector in Q1 of 2017 by N18.78 billion or 29.3% (not 576.90% higher) and N10.01 billion or 18.1% (not 684.11% higher) in Q4 of the same year, contrary to the NBS report.”

In its reaction, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) said government should intensify efforts aimed at reducing food import bill which stood at N1 trillion as at 2017. Opeyemi Alaran, Research, Statistics & IT Department, NACCIMA, stated: “The Association finds it worrisome that the Food Import bill remains quite high despite the human and natural endowments enjoyed by the country in that space. Analysis shows that the trend of expenditure on food importation has been on the increase since mid-2016, the period the Naira was devalued by almost 90%. However, this trend has begun to decline since Q3’17.”

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