…In boost for manufacturing
For the first time in over half a decade, Nigeria’s reliance on imported polypropylene, a versatile polymer fundamental to sectors ranging from packaging and textiles to automotive manufacturing, has plunged to its lowest point in six years following the entry of the Dangote Refinery into the domestic polypropylene market.
Data from industry trackers showed that Nigeria imported $278 million worth of polypropylene in the first nine months of 2024, indicating a 20 percent decline from the preceding year.
The reduction represents the steepest fall since 2019, underlining a market correction fuelled by rising local production.
Nigeria imported polypropylene was worth $322 million in 2019, $485 million in 2020, $544 million in 2021, $551 million in 2022, $350 million and $$278 million in the three quarters of 2024, according to TradeMap.
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The latest data by the National Bureau of Statistics (NBS) revealed that the country brought in the product valued at N137.4 billion in the first quarter (Q1) of this year, placing it at eighth position on the top 15 products imported by Nigeria from the rest of the world.
Why polypropylene matters
Polypropylene is a versatile polymer at the heart of modern manufacturing. From food packaging and plastic bottles to woven sacks, carpets, medical supplies, and automotive components, it is a material that underpins multiple value chains.
Nigeria, with its fast-growing population and expanding manufacturing base, has historically been a key consumer. But its heavy reliance on imports has left it vulnerable to foreign exchange volatility, supply chain disruptions, and high logistics costs.
In 2021 and 2022, when global crude oil and petrochemical prices soared, Nigeria’s import bill for polypropylene ballooned. Manufacturers often faced shortages or were forced to buy at elevated costs, which filtered into higher consumer prices.
The entry of local production is therefore a potential game-changer, not only reducing imports but also cushioning the economy against external price shocks.
Dangote’s disruption
The Dangote petrochemical plant is integrated with the wider refinery and fertilizer complex, enabling it to use by-products from refining as feedstock for polypropylene production. This integration provides a cost advantage compared to importers who have to ship materials across continents.
Since late 2023, as production ramped up, local buyers have increasingly turned to Dangote for supply. Industry operators confirm that the plant has been selling to both domestic manufacturers and international markets.
“Let me assure you of one thing, Nigeria from October will not import any more polypropylene, which used to be about a quarter of a million tons,” said Aliko Dangote, president of the group, at a media parley last year. “No more imports of polypropylene.”
He noted that the refinery is determined to ramp up production to reduce the cost of importation and the scramble for foreign exchange.
The impact is visible. By 2024, imports fell to $278.4 million, the lowest since 2019, even though the data only covers the first three quarters of the year. With the fourth quarter (Q4) numbers yet to be released, analysts expect the full-year figure could still edge slightly higher, but not anywhere near the 2021–2022 highs.
Relief for manufacturers
For Nigerian manufacturers, the availability of locally produced polypropylene offers both opportunities and challenges. On the one hand, it reduces foreign exchange pressure, since imports often required scarce U.S. dollars. On the other hand, questions remain about pricing, reliability, and distribution of Dangote’s output.
Read also: More European refineries struggle as Dangote ramps up output
Manufacturers in the plastics and packaging sector say supply from Dangote has been relatively steady, although pricing is still being benchmarked against international levels.
“This development has a major impact on import substitution. It will reduce imports. That means that forex demand, pressure and all of that will reduce,” said Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise (CPPE).
Analysts note that the availability of locally produced polypropylene is helping to ease FX pressure, as importers reduce dollar demand for purchases abroad. With Nigeria facing chronic forex shortages, the development could offer modest relief to the naira.
Yusuf added that for the local manufacturing sector, all those troubles will also reduce. “It will also handle foreign exchange. It will help our balance of payment position. From whichever angle you look at it, it’s a major positive development for the economy.”
The launch of the 830,000 mt/year polypropylene plant marks one of the final milestones in the commissioning of the oil refining and petrochemical complex, a process that has been ongoing since January 2024.
“Polypropylene output has now commenced, with supplies being distributed in 25 kg bags, a move that has already unsettled the domestic market,” two market sources told Platts, part of S&P Global Commodity Insights.
According to the Manufacturers Association of Nigeria (MAN), Dangote Petroleum Refinery and Petrochemicals’ polypropylene production would help to revive Nigeria’s struggling textile industry and significantly reduce the country’s reliance on imports.
MAN said the locally produced polypropylene would save Nigeria an estimated $267 million in import costs, strengthening the country’s industrial sector.
Segun Kadir-Ajayi, director-general of MAN, highlighted the decline of Nigeria’s once-thriving textile industry, which previously employed over 25,000 workers aged 18 to 40 in the northern region alone.
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He noted that Dangote Refinery and Petrochemicals’ production of polypropylene would significantly reduce Nigeria’s dependence on imports, as the country currently imports 90 percent of its annual polypropylene needs – approximately 250,000 metric tonnes.
This shift, according to him, is expected to position Nigeria as a net exporter, boosting FX earnings and strengthening the economy.
“For us in the manufacturing sector, this is a welcome development. It more than covers the 250,000 metric tons that constitute our national demand, which has been severely lacking,” Kadir-Ajayi said in an interview on national television.
