BIP implementation pushes raw materials utilisation to 65.7%

Textile Industry


Implementation of resource-based industrialization and backward integration policy (BIP) as contained in Nigeria’s Industrial Revolution Plan (NIRP) as well as proactive measures to avert foreign exchange exposure risks has pushed local sourcing of raw materials to 65.7 per cent.

Specifically, local raw-material utilisation increased to 65.70 percent in 2017 from 59.98 percent recorded in the corresponding half of 2016; thereby indicating 5.71 percentage point increase over the period.

The Central Bank of Nigeria (CBN) had in 2015, restricted 41 items, including plastic and rubber products, vegetable oil, cosmetics, poultry products, roofing sheets, wheelbarrows, toothpicks, among others, from accessing foreign exchange from the interbank foreign exchange market as a measure to drive local sourcing and production.

Though local raw-materials utilisation was on the increase across the sectors, Non-Metallic Mineral Products sectoral group recorded the highest utilisation level at 70.5 percent as against 60.08 percent recorded in 2016; thereby indicating 10.4 percentage point increase over the period.

In the Woods & Wood Products sector, local raw-material utilization increased to 70.1 percent from 58.75 percent recorded in the corresponding half of 2016; thereby indicating 11.35 percentage point increase over the period.It also increased by 1.49 percentage point when compared with 68.6 percent recorded in the preceding half. Local Sourcing of Raw-materials in the sector averaged 69.4 percent in 2017 as against 51.2 percent recorded in 2016; thereby indicating 18.2 percentage point increase over the period.

Furthermore, the Chemical & Pharmaceutical sector increased local raw-materials utilization to 62.6 percent in the second half of 2017 from 55.39 percent recorded in the corresponding half of 2016; thus indicating 7.21 percentage point increase over the period.

Analysis based on industrial zones showed that utilization increased in Edo/Delta, Imo/Abia, and Kano Sharada/Challawa, Ogun, Kano Bompai, Apapa, Ikeja and Kwara/Kogi zones. Conversely, Kaduna, Enugu/Anambra, Rivers and Abuja zones declined in the utilization of local raw-materials in the review period.

Local raw-materials utilization increased in Ikeja zones in the review period to 63.2 percent as against 61.3 percent recorded in the corresponding half of 2016; thus indicating 1.9 percentage point increase over the period.

It also increased by 1.8 percentage point when compared with 61.4 percent recorded in the preceding half. Local sourcing of raw-materials averaged 63.2 percent in 2017 as against 49.4 percent recorded in 2016; thus indicating 13.8 percentage point increase over the period.In Apapa, utilisation increased to 70.7 percent in the review period as against 54 percent recorded in the corresponding half of 2016; thus indicating 16.7 percentage point increase over the period.

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