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By Merit Ibe, [email protected]
Nigeria’s Nigeria’s moribund paper industry is costing the nation billions of naira annually on paper and related products importation.
Experts are urging urgent revival of this sub-sector, saying the annual humongous losses in foreign exchange was totally unacceptable as paper could easily be produced domestically.
Stakeholders attribute the sector’s collapse to lack of raw materials such as fibre trees like gmelina, inadequate investment, and neglect despite its economic potential and strategic importance to manufacturing.
Experts lament that despite abundant arable land and forest resources, Nigeria still depends heavily on importation. They are calling for legislative support, research-based institutions, and investment incentives to revive the sector and achieve self-sufficiency in raw material production.
Some experts are of the view that the paper sector has been largely in recession because of the digital technology disruptions and other macroeconomic headwinds, especially relating to exchange rate depreciation, forex liquidity crisis, high cost of funds, energy cost escalation among others.
Following Nigeria’s independence and the attendant boom in the industrial sector in the early 1970s, one of the sub-sectors that benefited from the growing boom according to records at that time was the paper and allied product sector. And on the strength of the volume of raw materials required to service the burgeoning paper factories, the idea of establishing paper mills became novel. In 1986, the nation had three pulp and paper mills – the Nigerian Newsprint Manufacturing Company (NNMC), Oku-Iboku, Akwa-Ibom State; the National Paper Manufacturing Company (NPMC) Iwopin, Ogun State; and the Nigerian Paper Mill (NPM), Jebba, Kwara State. However, their cumulative output of newsprint and industrial grades of paper at that time were largely underwhelming.
The operators emphasised the need to chart the course for self-sufficiency in production of raw materials by exploring opportunities for production of fibrous and cellulose materials from many seasonal plants in addition to wood.
They are optimistic that the country can look inwards to improve the sector and stop importation.
Clustering of operators in the sector which can propel the growth of the sector has been suggested over and over again, pinpointing research based centers for pulp and paper as essential to the survival of the sector.
Operators believe that the paper industry in Nigeria is a goldmine waiting for intelligent investors to explore, but there must be a well-defined strategy to develop the struggling industry.
The sector’s decline necessitates urgent analysis of policy, economic, and structural barriers to local paper manufacturing.
Industry stakeholders frequently cite conflicting government directives that undermine investor confidence and long‑term planning.
Daniel Dickson-Okezie, an SME expert, blamed the failed privatisation of the paper mills during the Olusegun Obasanjo administration, alleging that investors preferred importing paper to developing local mills. He stressed the need for technology transfer, local market development, and job creation through revival of domestic production.
According to him, the integrated pulp and paper mills established in Nigeria were privatised in the mid-2000s as a result of lack of adequate funds to import requisite raw materials and generally because of their non-performance.
“Nigeria spends billions on importation. The reason is that the mills in the country are not working.
However, the good news is, research has shown that tree species needed for manufacturing woodfree bond paper can be grown in Nigeria with a gestation period of 6 months and not 12 years or more as formerly believed. This means that paper production in Nigeria is doable and we only need to share the knowledge across board.
“Nigeria’s paper industry needs clusters of smart investors who can tap into the potential of raw material availability in the country.
Another major area of investment will be the aspect of machinery as the raw materials needed will be readily available.”
Data from the Manufacturers Association of Nigeria (MAN) shows that the pulp, paper, printing, and publishing sector recorded a modest 1.1 percent increase in capacity utilisation in 2024, rising to 58.3 percent. Production value also grew from N79 billion in 2023 to N84 billion in 2024. Despite this, the industry remains constrained by heavy import dependence, policy inconsistency, forex challenges, high energy costs, and weak infrastructure.
Key among the challenges in the period under review were overreliance on imported raw materials, delayed and stalled implementation of the National Diapers Policy.
Other issues stifling the growth of the sector include: “A surge in the influx of foreign, unbranded, and substandard diapers in the Nigerian markets; No funding for Research and Development; Lack of incentives to invest in tree planting and afforestation; Lack of creativity and innovation for fabrication of local machines for the industry; Exit of member companies from the country due to harsh economic realities; Increased operational costs incurred by members.”
The Director General of MAN, Segun Ajayi-Kadir further pointed out the persistent industry challenges such as the underutilization of paper mills, the exit of major players from the market, disruptive importation of finished goods and regulatory bottlenecks from government agencies on March 19, August 14 and December 19,2024.
He said the sector has engaged with stakeholders in the Ministry of Industry, Trade, and Investment via correspondence and discussions on the need to implement the diapers policy. “These efforts are still ongoing aimed at creating a structured policy environment that supports local manufacturing, curbs the influx of substandard imports and protects consumer health.”
Ajayi-Kadir, stated that the paper industry has been operating on the margins and contributed only little per cent of Nigeria’s GDP.
“You can imagine that we have 200 million plus people, we have the forests, we have the capacity to grow the sector.”
According to him, it does not only take a good entrepreneurship to succeed, it also requires strong institutions and leaders that have the foresight for the private sector to thrive.
“The paper industry is a sector that has good prospects but it needs supportive policies to aid its growth.
Muda Yusuf, chief executive officer, Center for Promotion of Private Enterprises (CPPE) said paper industry has a profound economic impact across all sectors of the economy hence the need to sustain it.
He lamented that digitalization has emerged as a critical issue and challenges facing the paper manufacturing industry as the rise of digital technology has led to a decrease in demand for paper products as consumers and businesses increasingly rely on digital communication and storage.
According to him, the reality is that the growth in digital technology has greatly disrupted the sector, especially as a mode of communication, noting 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 paper industry has a profound economic impact across all sectors of the economy. The value chain is even more impactful with millions of jobs created in the paper industry value chain. This includes pulping, paper production, printing, marketing, logistics etc.
For the Managing Director and Chief Executive Officer of FAE Limited, Mrs. Funmilayo Bakare-Okeowo, observed that in recent years, the global push towards a paperless society, especially the rise of digital communication, has posed significant challenges to traditional mediums such as newspapers and postal agencies
Bakare-Okeowo insisted that the world should not give up on paper because it is a bio-degradable product.
She noted that without doubt, the industry was grappling with lots of challenges which affect the smooth running of the activities of the sector.
She reeled out the challenges to include but not limited to high cost of paper; in which various factors come into play to influence the increase in paper prices like electricity supply and fuel cost, paper mill closures and also increased demands for tissue papers.
Other challenges, she emphasised, were high foreign exchange; continuous depreciation of the naira, collapsed infrastructure and poor funding of the sector.
She said the high cost associated with the importation of pulp and paper products are huge issues as the integrated pulp and paper mills in Nigeria depend overwhelmingly on imported long fibre pulp.
“The issues of inadequate research effort are not being supported towards the conversion and utilisation of fibrous raw materials into pulp and paper and mills development in Nigeria.”
Proffering solution to the challenges she noted that innovation by researchers has shown that Kenaf can be used in paper production which offers environmental advantages over reproducing paper from trees.”
