Rubber production first began in Nigeria in the late 19th century. Wild rubber trees were discovered, then tapped, creating an immediate export market for the country. Due to poor tapping systems and techniques, however, the supply of wild rubber from Nigeria decreased just as sharply as it increased.
To counter the issues with the wild rubber, a new species of rubber tree was introduced to Nigeria in 1895 from England. The first rubber estate was planted in 1903, with a second planted in 1912. By 1925, there were about 1,000 hectares of rubber plantations owned by Europeans in the southwestern portion of the country.
The Nigeria rubber industry provides three key supports for the national economy. It provides raw materials that are needed for agriculturally-based firms, provides income as the country is a net exporter of rubber, and it provides numerous employment opportunities.
In 1990, Nigeria was able to become the largest producer of rubber in Africa. That title has since been ceded to the Ivory Coast.
Fascinating Nigeria Rubber Industry Statistics
#1. In 2016, over 156,000 tons of natural rubber was produced by the Nigeria rubber industry. That was the most rubber produced since 1991, when over 155,000 tons of natural rubber were produced. (Knoema)
#2. Total capacities for Nigeria are expected to fall by at least 50% in coming years because there has been a failure to replenish old trees or plant new ones. (Sun News Online)
#3. Because of government neglect, the value of the rubber cash crop for the country is far below its maximum potential. Estimates suggest that Nigeria is losing upwards of $6 billion in potential revenues because of its inability to supply rubber exports to the rest of the world. (Sun News Online)
#4. About 5% of the total global natural rubber production originates in Africa. Even though Nigeria has more than 230,000 hectares of additional plantation space compared to the Ivory Coast, annual outputs from the Ivory Coast are more than double what Nigeria is able to produce. (Rubber Asia)
#5. Agriculture is the largest sector of the economy in Nigeria, employing about 70% of the total population. It also provides about 40% of the GDP for the country. (Foraminifera Market Research)
#6. Nigeria exports average about 60,000 tons of natural rubber each year. The total global market demand for natural rubber, however, is about 12 million tons per year. (Foraminifera Market Research)
#7. At its peak, the rubber industry in Nigeria had 54 firms in operation. Today, there are fewer than 20 firms still active, which is why total export volumes within the industry have been cut by as much as 40%. (The Nation)
#8. The potential value of one ton of natural rubber produced in Nigeria for the export market is about $2,000 in revenues. (The Nation)
#9. To make the rubber industry become prosperous once again, estimates suggest that the government may need to subsidize up to 80% of the cost to plant seedlings and cover the long-term expenses that are necessary to bring rubber trees to maturity. (The Nation)
#10. In the Q1 2017, the price for RSS3 natural rubber was $2,543 per ton. In Q4 2017, the price for the same product was just $1,589 per ton. (Rubber Study)
#11. In total, the rubber industry generates about $18 billion in total revenues in the United States each year. If Nigeria could maximize its potential for rubber production, it would be able to provide up to one-third of the U.S. market with affordable rubber. (IBIS World)
#12. About 60% of the rubber that is produced in Nigeria is sent to tire manufacturers. (Statista)
#13. In recent years, the consumption of rubber has exceeded the amount produced globally, which is why there is such potential for the Nigeria rubber industry. In 2016 more than 300,000 metric tons of rubber products were consumed over the annual production levels. (Statista)
#14. Nigeria’s primary export customers in the Asia-Pacific region are already the world’s largest consumers of natural rubber products. Almost 50% of the total natural rubber supply, or about 5.5 million metric tons, is consumed in the APAC region annually. (Statista)
#15. Government officials continue to blame unfavorable rubber prices from 1996-2002 for the reason behind the lack of rubber production domestically. (The Nation)
#16. Over 80% of the rubber processors located in Edo and Delta produce crumb rubber or crepe for export. (Direct Research Journals)
#17. The manufacturing and processing facilities which support the Nigeria rubber industry have been operating at one-sixth of their capacity for decades. The installed processing capacity in Nigeria is 600,000 tons annually. (Direct Research Journals)
#18. There are currently 41 rubber processing factories present in Nigeria, down from 57 factories from just a decade ago. Only 27 of these factories are either functional or operational right now. (Direct Research Journals)
#19. To restore the rubber industry in Nigeria, it is estimated that 25% of the existing plantations will need to be replanted or rehabilitated within the next 36 months. (Direct Research Journals)
Nigeria Rubber Industry Trends and Analysis
Many of the farmers who have been producing rubber in Nigeria have switched to other cash crops for one simple reason: value. The government of Nigeria has placed a greater emphasis of support on crops other than rubber. Because of that, the rubber industry has fallen into shambles.
There is still an opportunity for the industry to recover. The only way that can occur is if the government of Nigeria is willing to shift away from its full focus on the oil and gas industry to once again provide supports for the rubber industry. If the government is not willing to do so, then they must permit foreign direct investment to occur.
There will be difficult times ahead for the Nigeria rubber industry. If nothing changes, even with the high production levels in 2016, the value this industry provides to the local economy will be substantially variable. That means the industry cannot provide a reliable outcome at this time.