Nigeria’s $5 Billion Furniture Industry Overcomes Challenges, Sees Bright Outlook

Local furniture makers are grappling with a host of challenges, including skills shortages, a high exchange rate, and the impact of the ‘japa’ syndrome, which sees a significant number of Nigerian youths seeking to emigrate. Despite these obstacles, the future outlook for the industry remains positive.

The removal of fuel subsidies in May 2023 has contributed to high operational costs, further complicating the landscape for Nigeria’s furniture sector. The Raw Materials Research and Development Council highlights deficiencies in technology and finance, a lack of qualified manpower, and rapid turnover as additional hurdles.

According to the Industries and Market Furniture Report 2023 from InfoStride News (formerly The PUNCH), the industry is valued at $5 billion in 2023 and is expected to grow by 12.10 percent annually between 2023 and 2028.

The furniture industry revolves around creating functional and aesthetically pleasing pieces for various settings, including homes, businesses, and institutions. Entrepreneurs in this field often kickstart their ventures with thorough research on market trends, customer preferences, and design innovations to meet market demands.

While the sector experienced significant growth in 2021, driven partly by increased demand during the COVID-19 pandemic, challenges emerged in 2022 due to eased restrictions and rising inflation. Despite these setbacks, analysts express optimism for expansion in 2023, citing resilient consumer spending.

One of the critical aspects of furniture production is the sourcing of raw materials, including wood, metal, fabric, and upholstery materials. Ifeyinwa Ighodalo, the CEO of DO.II Designs Ltd, notes the company’s commitment to global standards, with approximately 80 percent of materials sourced locally and the remainder imported, particularly for accessories, lamps, and decorations.

However, challenges related to the scarcity of dollars in Nigeria’s foreign exchange market, compounded by a surge in inflation, have affected the industry’s operational costs. The CEO describes the difficulties in adjusting prices amid rising material costs, sometimes by as much as 100 to 200 percent, leading to selling at a loss.

Despite spending over $8 billion annually on furniture imports, Nigeria’s furniture-making industry faces a skills gap, exacerbated by the ‘japa’ phenomenon, with many skilled workers seeking opportunities abroad. The CEO highlights the need for a training school to address this challenge and emphasizes the importance of refining and educating the local workforce.

Addressing the ‘japa’ syndrome, where a significant percentage of Nigerian youths express a desire to leave the country, the World Bank report places Nigeria in the third position in West Africa. This trend impacts local industries, including furniture manufacturing, where skilled craftsmen play a crucial role in shaping and assembling materials into furniture pieces.

In conclusion, while Nigeria’s furniture industry confronts various challenges, including skills shortages, a high exchange rate, and the impact of the ‘japa’ syndrome, the sector’s positive growth trajectory and potential for expansion present opportunities for improvement and collaboration between the government and industry stakeholders.