Nigeria’s manufacturing sector has remained stuck in single-digit contributions to the national Gross Domestic Product for a decade. Despite various government efforts to spur industrial growth, the industry continues to lose ground to regional competitors such as Morocco, Egypt, South Africa, and Ghana.
Data from the statistical bureau and international lenders reveals a downward trend. Manufacturing accounted for 9.43 percent of GDP in 2015, but that share slid to 8.05 percent by 2025. The sector reached a high of 9.65 percent in 2018 before facing disruptions from the pandemic and subsequent economic instability. This performance leaves the nation far from the goals set by the recently launched National Industrial Policy, which targets a 20 to 25 percent contribution by 2030.
For the average citizen, this persistent underperformance translates into a daily struggle with the high cost of living and limited job opportunities. When a country relies heavily on imports for basic goods, local prices become hostage to currency fluctuations and global supply chain shocks.
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The economy now faces severe strain.
This reality creates a cycle where domestic production cannot keep pace with the needs of a growing population. It makes it difficult for businesses to scale or hire new workers. As , the pressure on household budgets limits the demand for manufactured items.
Dele Kelvin Oye, chairman of the Alliance for Economic Research and Ethics Ltd/GTE, described the situation as a lost period for the country. He noted that the sector is heavily concentrated in the food, beverage, and tobacco industries. This reliance makes manufacturers particularly vulnerable to foreign exchange volatility and shifting consumer purchasing power.
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Industry stakeholders identify several structural issues preventing a recovery. These include unreliable electricity, high interest rates, and the burden of multiple taxations. Additionally, the dependence on imported raw materials continues to drain resources.
To reverse this trend, observers suggest that the government must move beyond policy announcements to address logistics and financing. Without such changes, the manufacturing sector risks remaining trapped in its current state, unable to provide the economic stability that a large domestic market requires.
The removal of the petrol subsidy in 2023 was intended to free up capital for public investment, but it has instead increased operating costs for many industrial players. Achieving the long-term targets will now depend on whether the state can reconcile these high costs with the need for a stable environment for production.