Nigeria missing out on $ 360b pulp, paper market
DESPITE the abundance of raw materials needed for self- sufficiency and the production of pulp and paper in the country, Nigeria is still missing out on the massive income to be made on the production, sale and export valued at $ 360 billion.
The global paper industry is projected to rise to $ 370 billion by 2029 on the back of rising population, demand for education and sustainability goals.
However, after the collapse of its paper mills, thousands of jobs and trillions of income lost, the country currently spends over four trillion naira annually to import more than 91 per cent of its paper needs.
Nigeria currently only produces brown paper, used to package goods and this constitutes less than 10 per cent of the country’s needs. The remaining 91 per cent, constituting white paper which is used for every other thing, is imported. According to the National Bureau of Statistics ( NBS), as of last year, Nigeria’s paper industry was worth N398.8 billion. Its value was N365 billion in 2022; N363 billion in 2021 and N255 billion in 2020. This shows that despite the challenges, it has grown over the years with the potential to do more.
According to the Chief Executive Officer ( CEO) of the Centre for the Promotion of Private Enterprise ( CPPE), Dr Muda Yusuf, the growth in digital technology has greatly disrupted the sector, especially as a mode of communication.
“Nonetheless the sector had remained resilient and critical to the economy across all sectors. The paper industry has been largely in recession because of digital technology disruptions and other macroeconomic headwinds, especially relating to exchange rate depreciation, forex liquidity crisis and high cost of funds and energy cost escalation. The sector contracted by 1.47 per cent in 2022 and by 0.56 per cent in 2023,” he said.
Lamenting the country’s loss of a vibrant pulp and paper industry between the late 60s and early 90s, he said those upstream industries provided intermediate inputs for the downstream segments of the industry and were even exporting paper products to countries in the West African subregion and beyond.
“The first paper mill, the Nigeria paper mill Jebba was commissioned in 1969. The Iwopin Pulp and Paper Company ( IPPC),
Ogun State was commissioned in 1975. The Nigeria Newsprint Manufacturing Company, Oku Iboku ( NNMC), Akwa Ibom state, was commissioned in 1986 and these were great successes in backward integration which made life easy for printing, paper, publishing and packaging companies.”
“Regrettably, by the early 90s, all the paper mills packed up. Soon after, they were privatised. But the situation became worse as the privatisation could not save the situation but accelerated the collapse of the mills, with allegations of asset stripping and other adverse developments post privatisation.” He said this was the start of the country’s descent into import dependency and the beginning of the sector’s numerous challenges, as the industry became highly vulnerable to exchange rate volatilities and forex market liquidity issues.
Pointing out that the paper industry has a profound economic impact across all sectors of the economy, he said the value chain is even more impactful with millions of jobs created in the paper industry value chain, including pulping, paper production, printing, marketing, logistics and so on.
Director General of the M a n u f a c t u r e r s Association of Nigeria ( MAN), Segun Ajayi- Kadir, stated that Nigeria’s paper industry has been operating on the margins and contributes a mere 0.17 per cent of the country’s GDP. In Africa, South Africa and Egypt currently control 65 and 20 per cent of the industry respectively.
“We have the manpower, the forests and the capacity to grow the sector but yet, nothing. This sector has good prospects but needs the right policies to aid its growth. However, the environment in which we operate does not have the macroeconomic or infrastructural support that will aid its growth,” he said.
On her part, the Chief Executive Officer, FAE Limited, Princess Funmilayo Bakare Okeowo, said the demand for paper will always be present. Listing the challenges bedeviling the industry to include non- existent infrastructure, foreign exchange crisis, naira depreciation, high cost of raw materials, poor research efforts, policy- related issues and so on, she said the country would not only have saved trillions of Naira from local production it would also have earned foreign exchange from exports. She called on the federal government to save the industry by creating an enabling environment for local players and to also woo foreign investors to resuscitate the industry.
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Regrettably, by the early 90s, all the paper mills packed up. Soon after, they were privatised. But the situation became worse as the privatisation could not save the situation but accelerated the collapse of the mills, with allegations of asset stripping and other adverse developments post privatisation. ”