Manufacturing Zone
Nigeria’s manufacturing sector suffered a significant loss of approximately N1.2 trillion between 2019 and 2023, but there’s been a notable rebound in 2024. According to Quartus Economics’ report, “Inside Nigeria’s Quiet Recovery,” the sector grew by 1.19% year-on-year, equivalent to N207 billion. This recovery is attributed to various factors, including government support and stabilization efforts under President Bola Tinubu’s administration.
The chemical and pharmaceutical products subsector grew by N33.9 billion or 2.37%, while food, beverage, and tobacco added N81.5 billion or 2.50%. Non-metallic products increased by N15.5 billion or 1.72%, and motor vehicles and assembly grew by N1.29 billion or 1.27%. Basic metals also saw an increase of N3.33 billion or 0.62%.
Despite this recovery, some subsectors still face challenges. The textile, apparel, and footwear industry declined by N72 billion or 1.58%, while oil refining contracted by 14.67% or N1.7 billion. Pulp and paper recorded only a marginal rise of 0.44%, and electrical and electronics inched up by 1.27%.
The Manufacturers Association of Nigeria (MAN) has urged the federal government to prioritize policies that strengthen manufacturing and industrialization to reflect the real economic situation and gains of the country’s rebased GDP. The association emphasized the need for policy stimuli and a synthesis of domestic growth through export-focused and trade strategies to enhance resilience, foster steady growth, and ensure the sector gains significant traction.
The Tinubu administration has injected N1 trillion into the manufacturing sector as palliatives to reinvigorate the sector. Industry stakeholders are concerned about the implications of the challenges facing the sector for Nigeria’s industrialization goals and are calling for urgent reforms to address the sector’s structural issues.
The challenges facing the manufacturing sector include high production costs exacerbated by erratic power supply and import dependency on raw materials, limited access to foreign exchange, uncertain tax policies, infrastructure deficits, and inflationary pressures reducing consumer demand and increasing financial strain on manufacturers.
To address these challenges, industry stakeholders recommend reforms and strategic initiatives, such as accelerating the adoption of Compressed Natural Gas (CNG) to reduce transportation costs, providing single-digit interest rates to productive sectors, recapitalizing the Bank of Industry (BOI) to enhance credit access, implementing tax reforms, and investing in infrastructure development to improve energy security, transportation, and the overall business environment.
