UN rates Nigeria high on importation of vehicles, drugs, others
The United Nations (UN) has said that Nigeria imports more of cars, smartphones, drugs, cereals and refined crude oil.
This was disclosed in a recent report by the United Nations Conference on Trade and Development (UNCTAD) titled, ‘The Economic Development in Africa Report 2023: The Potential of Africa to Capture Technology-intensive Global Supply Chains.’
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In view of Africa’s ever growing population and large consumer market, the continent can position itself as an economic destination for future leading-edge supply chains.
If this is achieved companies across the world might start to have a rethink on their supply chain strategies to address gaps and mitigate risks.
The UN stressed that the continent needs to play a more impactful role in the global supply chain in building resilience, especially because of its large consumer market.
Despite the large consumer market, the continent still faces logistical and supply chains challenges such as poor infrastructure (transport, warehouse and other facilities), informality, weak institutions and regulations, fragmented markets, limited sources of capital, low levels of technology and political risks.
“These barriers can increase the cost of doing business and trade in many African countries, especially those that rely heavily on foreign imports of goods and services,” the report stated.
“For example, a country such as Nigeria, which has a population exceeding 200 million, is one of the biggest economies in the region (United Nations, 2022).
“Yet it remains highly dependent on the import of goods, such as refined petroleum oils, cars, smartphones, cereals, and pharmaceuticals, to satisfy its consumers (Observatory of Economic Complexity, 2022; Statista, 2023).”
Despite the challenges, Rebeca Grynspan, Secretary-General UNCTAD, said the continent’s growing population and large consumer market presents it with an advantage, as firms look for new destinations.
“Africa’s growing population, increasingly large consumer markets, and expanding business opportunities are major sources of growth and prosperity for the world and key factors that position Africa as a strategic region in the drive for geographically diversified supply chains,” she said.
“Moreover, Africa’s large reserves of critical minerals that are vital for global supply chains of high technology-intensive industries can turn African economies into key suppliers of parts and components in the automotive, electronics, renewable energy, and medical devices sectors.”
The agency further revealed that many factors can influence a company’s decision to relocate parts of its supply chain to another country or region, and this includes a conducive environment for increased productivity, high-growth markets, high-profit entrepreneurship, an active and technology-oriented workforce, and a dynamic consumer base.
It noted that Nigeria experienced subdued growth in 2022, with inflation, power supply challenges, and lower-than-expected oil production affecting economic performance in the country.
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