Nigeria's manufacturing sector is shifting towards local raw material sourcing as naira devaluation and foreign exchange scarcity disrupt supply chains. A recent Financial Times report noted that many firms, once heavily dependent on imports, are now embracing local alternatives to survive rising costs.
The Central Bank's decision to float the naira in 2023 triggered volatility, leaving manufacturers scrambling for dollars. The Manufacturers Association of Nigeria (MAN) said about 800 firms shut down last year due to high input costs, while multinationals like P&G and GSK scaled back operations.
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However, the crisis has pushed some companies to innovate. Chemical and Allied Products (CAP) now sources 90% of its calcium carbonate locally, cutting costs by nearly 60% in under a year. Similarly, Beta Glass reduced forex exposure by partnering with suppliers who invoice in naira.
MAN data shows local raw material usage rose to 57.1% in 2024, up from 52% in 2023. Analysts believe SMEs stand to gain from this shift, as large manufacturers increasingly rely on local suppliers, fostering collaboration and boosting domestic value chains.
Despite challenges like poor infrastructure and regulatory hurdles, business confidence is gradually improving, with hopes that ongoing reforms will sustain growth and strengthen local industries.
