For decades, successive Nigerian governments have pledged to build a competitive industrial economy. Yet the performance of the manufacturing sector tells a far less optimistic story. Despite its central role in job creation, economic diversification and export growth, manufacturing continues to operate well below capacity, reinforcing stakeholders’ claims that official commitment to the sector has largely been rhetorical rather than practical.
Industry players argue that the much-publicised Nigeria First policy of President Bola Tinubu’s administration, alongside two earlier executive orders designed to boost local production, have delivered little measurable impact. Instead, the sector remains constrained by weak policy execution, high production costs and chronic infrastructure deficits.
Data from the Manufacturers Association of Nigeria (MAN) shows that factories are operating at below 50 per cent of installed capacity, a situation mirrored by a steady decline in manufacturing’s contribution to gross domestic product (GDP). Quarterly figures reveal consistent year-on-year drops in output and value added, underscoring what many describe as long-standing structural weaknesses.
A third-quarter 2025 report by KPMG paints a similarly bleak picture. It revealed that manufacturing grew by just 1.38 per cent in 2024, with an average growth rate of 1.17 per cent over the past five years. Manufacturing’s share of GDP fell from 9.2 per cent in 2018 to 8.6 per cent in 2024, while the sector’s contribution to total exports plunged from 10.8 per cent in 2019 to 2.2 per cent in 2023.
Although export values rose sharply in 2024, increasing by 194 per cent to N2.29 trillion, manufacturing still accounted for only about three per cent of total exports. This lags far behind regional peers such as Botswana, Egypt and South Africa, highlighting Nigeria’s struggle to translate industrial activity into global competitiveness.
Stakeholders largely blame inconsistent policies, limited access to affordable finance and the absence of targeted industrial support. While past administrations introduced initiatives to revive manufacturing, implementation has been weak. Under the Buhari administration, Executive Orders 003 and 005 were signed to promote Made-in-Nigeria goods and develop indigenous capacity in science and technology. However, industry leaders say enforcement was poor and compliance by government agencies minimal.
Executive Order 003 mandated ministries, departments and agencies (MDAs) to prioritise locally manufactured goods in public procurement, with at least 40 per cent of spending directed at Nigerian products. Executive Order 005 sought to harness domestic talent to boost technological innovation. In practice, manufacturers say both orders were largely ignored.
In May 2025, the Tinubu administration unveiled the Nigeria First policy, promising to consolidate previous directives through a new executive order that would bar MDAs from purchasing foreign goods where local alternatives exist. The government also warned of sanctions for non-compliance. Yet industry leaders insist that little has changed on the ground.
The Director General of the Textile Manufacturers Association of Nigeria, Dr Gamma Kwajaffa, said similar directives in the past failed due to lack of enforcement. He noted that imported polyester fabrics, often cheaper due to foreign refining advantages, continue to flood the market, undercutting locally produced cotton textiles. As a result, Nigeria’s textile industry has shrunk from over 200 mills to about 15 operational plants.
Kwajaffa and other manufacturers argue that procurement rules alone are not enough. They call for protective tariffs, stable electricity pricing, and dedicated industrial parks with subsidised power, similar to policies in competing economies.
MAN executive council member John Aluya echoed these concerns, stressing that many MDAs still favour imported goods because they are cheaper. He warned that without penalties for breaches of procurement rules, the Nigeria First policy would remain ineffective. According to him, full implementation could stimulate demand, encourage investment and create jobs across the manufacturing value chain.
Business groups such as the Lagos Chamber of Commerce and Industry (LCCI) agree that local procurement is a step in the right direction but insist it must be backed by reliable power supply, access to single-digit credit and protection against import dumping. LCCI President Leye Kupoluyi said a strong manufacturing base, not natural resources, is what distinguishes developed economies from developing ones.
The challenges facing manufacturers are stark. MAN disclosed that by 2023, 767 manufacturing companies had shut down, while 335 were struggling to survive. High interest rates of 30–35 per cent, heavy reliance on imported raw materials worth over N3 trillion annually, and persistent power outages continue to erode competitiveness.
KPMG’s 2025 report aligns with industry demands, urging the government to unlock long-term finance by strengthening development finance institutions, accelerate power sector reforms, improve transport infrastructure, streamline taxes, modernise ports and digitise border processes.
Until these issues are addressed, stakeholders warn that Nigeria’s manufacturing sector will remain trapped in decline, with policies announced but rarely enforced, and industrialisation remaining more promise than reality.
