A trade expert who serves as the Treasurer of the Oyo State Shippers Association, Mrs. Aminat Animashaun, has identified high interest rates on loans and poor infrastructure as key barriers hindering the export of Nigerian-made goods.
In an interview with the News Agency of Nigeria (NAN) in Ibadan on Saturday, Animashaun lamented that entrepreneurs seeking to export locally produced goods are struggling due to expensive credit facilities.
She called on the government to introduce single-digit interest-rate loans to encourage more production for export.
“If the government can reduce the high interest rates, it will lower the overall cost of locally made goods.
“This will make Nigerian products competitive in terms of pricing, ensuring that imported goods are not cheaper while maintaining or even exceeding their quality,” she said.
Unreliable power, poor road networks
Beyond financial challenges, Animashaun, who is also the Chief Executive Officer of De’rayo Vocational Limited, pointed out that unreliable electricity supply, poor road networks, and high logistics costs further stifle the growth of Nigerian exports.
- She urged the government to invest in infrastructure, particularly roads and stable power supply, while also reducing the cost of trade certifications and logistics fees to support exporters.
- To further promote Nigerian goods in global markets, she suggested the creation of trade houses in different countries, which would serve as hubs to attract foreign buyers.
“By addressing these challenges, the government can create a more conducive environment for exporters, enabling us to compete globally and contribute to Nigeria’s economic growth,” Animashaun emphasized.
Poor performance of the manufacturing sector
Nigeria’s manufacturing sector performs poorly compared to some other sectors. Its contribution to exports is low; its average annual growth rate is weak; and its contribution to the GDP is low.
- The gross value of manufactured goods exported in 2024 rose by 66% from N778.44bn in 2023 to N2.28tn in 2024. However, experts say the value is still poor.
- In Q4 2024, the manufacturing sector’s contribution to Nigeria’s real GDP was 8.07%, a decrease from 8.23% in Q4 2023. Although, its real GDP growth was 1.79%, up from 1.38% in the previous quarter.
The Manufacturers Association of Nigeria says the sector’s growth is also concentrated in a few sub-sectors, and economic instability and currency volatility have negatively impacted profit margins and export revenues.
What you should know
- As reported by Nairametrics, the Lagos Chamber of Commerce and Industry (LCCI) recently called on the federal government to develop a comprehensive industrialization strategy to boost local manufacturing capacity.
- The LCCI Director General, Dr. Chinyere Almona, made the call while expressing concern over the poor performance of the manufacturing sector.
- The African Export-Import Bank (Afreximbank) also urged Nigeria and other African countries to improve investment in manufacturing and infrastructure to unlock the continent’s economic potential.
