Manufactured imports hit ₦17.99trn as factory credit shrinks

Nigeria’s import dependence deepened in the first half of 2026 as spending on manufactured goods climbed to ₦17.99 trillion, even as bank credit to the domestic manufacturing sector contracted by ₦1.92 trillion, raising fresh concerns over the country’s ability to replace imports with locally produced goods.

Analysis of the latest National Bureau of Statistics (NBS) Foreign Trade Statistics showed that manufactured goods imports rose 16.9 per cent from about ₦15.39 trillion in the first half of 2025.

The increase accelerated in the second quarter, when manufactured imports reached ₦9.51 trillion, up 12.1 per cent from ₦8.48 trillion in Q1 and 20.7 per cent above the ₦7.88 trillion recorded in Q2 2025. The NBS published the Q2 2026 trade report on September 7.

The latest figures mean that almost ₦18 trillion was spent on manufactured products in just six months, highlighting the continued dependence of Nigerian businesses and consumers on foreign-made goods despite government efforts to strengthen domestic production.

The trend is particularly significant against the financial conditions confronting local manufacturers.

The Manufacturers Association of Nigeria (MAN) reported that commercial bank credit to manufacturing fell 22.5 per cent, from ₦8.53 trillion in December 2024 to ₦6.61 trillion in December 2025, a contraction of ₦1.92 trillion. The association said the decline could undermine industrial expansion, job creation and economic diversification.

MAN also reported that borrowing costs remained prohibitively high, with average prime lending rates around 27 per cent and maximum rates reaching 35.6 per cent in May 2026.

This creates a difficult economic equation. While local manufacturers require affordable long-term capital to expand factories, acquire equipment and increase production, the demand that could support those investments is increasingly being met through imports.

The continued reliance on imported manufactured goods also means that a significant portion of Nigeria’s foreign exchange is being channelled abroad to meet domestic consumption and production needs.

The Q2 trade data showed that manufactured goods represented 65.94 per cent of total imports, valued at ₦9.51 trillion during the quarter.

The composition reflects Nigeria’s continued dependence on imported finished products and industrial goods even as policymakers pursue import substitution and local value addition.

The development also comes despite signs of improvement in manufacturing activity. NBS data showed that real GDP growth in the manufacturing sector reached 3.29 per cent year-on-year in Q1 2026, above both the corresponding quarter of 2025 and the preceding quarter.

But stronger output growth has yet to translate into a meaningful reduction in import dependence.

For businesses, the rising import bill reflects a combination of factors, including gaps in domestic productive capacity, high energy costs, expensive financing and the availability of foreign alternatives that may be more competitive in some product categories.

For policymakers, the figures raise questions about whether existing industrial incentives and financing arrangements are sufficient to make local production commercially viable.

MAN has argued that the contraction in manufacturing credit is particularly damaging because manufacturers need long-term capital to expand capacity, modernise equipment and improve competitiveness. The association has also linked the credit squeeze to the high cost of borrowing and reduced access to development-finance programmes.

The implications extend to employment and inflation. If domestic factories cannot access affordable capital to expand supply, Nigeria risks remaining dependent on foreign producers while exposing local prices to exchange-rate movements, international freight costs and external supply disruptions.

The latest import figures therefore present a sharp test for Nigeria’s industrialisation strategy.

The country can continue to record growth in manufacturing activity while simultaneously increasing its dependence on imported manufactured goods, but such a pattern would limit the sector’s contribution to jobs, exports and foreign-exchange savings.

The challenge is now to reverse the imbalance by making domestic production more competitive through cheaper productive credit, reliable energy, stronger infrastructure and policies that allow Nigerian manufacturers to capture a larger share of the ₦17.99 trillion market currently being served by imports.