Nigeria’s local petroleum oil consumption hits 54.6% – RMRDC

Nigeria’s reliance on locally sourced petroleum oil has reached 54.6 per cent, according to recent data released by the Raw Materials Research and Development Council.

This was disclosed in a statement on Friday by the Director of Corporate Affairs at the RMRDC, Chukwuma Ngaha.

The council highlighted the increasing utilisation of domestic resources while emphasising the urgent need for greater value addition to raw materials before export.

The newly launched Quarterly Statistical Bulletin Series by the RMRDC provides valuable insights into Nigeria’s trade performance, raw material utilisation, and economic opportunities.

The report, which covers data from the first quarter of 2024, noted that while petroleum oil remains the most utilised mineral in Nigeria, there is a critical need to improve local processing and value addition.

“Currently, Nigeria’s value addition rate stands at 25 per cent, with projections indicating that increasing this rate could lead to a 15.6 per cent rise in employment, a 2.2 per cent boost in industrial output, and a 21.25 per cent improvement in the exchange rate against the dollar,” the report stated.

To address the imbalance between raw material exports and local consumption, the RMRDC has called for the development of local industries capable of adding value to materials before export.

The Director-General/CEO of the RMRDC, Prof. Nnanyelugo Ike-Muonso, underscored the importance of sustainable solutions, stating, “Nigeria’s manufacturing sector contributes only about 3 per cent of the nation’s foreign exchange earnings, while over 30 per cent of our import bill is linked to raw materials and intermediate goods that could otherwise be sourced locally.”

The report also revealed Nigeria’s continued dependence on imports, especially in the energy sector.

Total imports in the first quarter of 2024 were valued at N2.3tn, with energy materials accounting for over N1.5tn of the total. This highlights the nation’s vulnerability to external supply chains and the need to optimise the use of domestic resources.

In addition to petroleum, agricultural and mineral raw materials play significant roles in Nigeria’s trade balance. For example, agricultural exports totalled N226bn in Q1 2024, while agricultural imports amounted to N1.1tn.

Despite being a leading exporter of raw materials such as cocoa, ginger, and tin, Nigeria continues to rely heavily on imports of processed derivatives, including cocoa butter and ginger powder.

The RMRDC’s report stressed the importance of strengthening local processing capabilities to improve Nigeria’s economic stability.

“By enhancing local processing capabilities and focusing on value addition, Nigeria can drive industrial growth, create jobs, and strengthen its economic stability,” the report noted.

This publication forms part of a broader effort by the RMRDC to encourage stakeholders across various sectors to make informed decisions aimed at fostering industrial growth and reducing Nigeria’s dependence on imports.

Source: The Punch

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