Market News

By Sami Tunji

The Nigerian Economic Summit Group has raised concerns over the decline of Nigeria’s manufacturing sector, blaming high energy costs, import competition, inadequate financing and weak industrial coordination for the country’s poor productive capacity.

The NESG, in a statement issued on Sunday ahead of the 32nd Nigerian Economic Summit, warned that manufacturing, which should drive Nigeria’s structural transformation, had instead suffered a relative decline.

It said, “In manufacturing, the sector contributes a declining share of GDP and has failed to develop the deep backward and forward linkages that characterise industrialising economies.”

According to the group, Nigeria continues to export raw materials and import finished products despite its vast natural resources, large population and domestic market of more than 220 million consumers.

It described the situation as a fundamental structural imbalance that had suppressed value creation, constrained employment and left economic growth exposed to commodity price cycles.

The NESG said the country’s productivity problems were not temporary but resulted from years of underinvestment in infrastructure, inefficient regulation, weak institutional capacity and inadequate capital flows to productive sectors.

On challenges facing manufacturers, it said, “Energy costs remain crippling, with manufacturers frequently citing electricity as their single largest operational constraint. Import competition, particularly from subsidised goods, has undermined domestic producers.”

The group also blamed the absence of an integrated industrial policy, saying manufacturers lacked the coordinated support available to producers in comparable economies through tariff structures, local content requirements and targeted industrial financing.

It said the summit would examine measures to restore manufacturing competitiveness, including Special Economic Zones, fiscal incentives for value-added production and local content frameworks capable of creating market opportunities for domestic producers.

The NESG also raised concerns over the allocation of capital in the economy, saying investment had historically flowed into sectors offering quicker returns while manufacturing and other productive activities remained underfunded.

It said financial services, real estate and trading had attracted capital, while manufacturing plants, agro-processing facilities and industrial infrastructure requiring long-term financing struggled to secure investment.

“This misallocation of capital is both a market failure and a policy failure, and it explains much of Nigeria’s productivity stagnation,” the group stated.

It said discussions at the summit would consider development finance instruments, blended finance, risk-sharing mechanisms for productive-sector lending and reforms to incentives that favour extraction over production.

The NESG also identified agriculture as a major opportunity for industrialisation, noting that the sector employs about 36 per cent of Nigeria’s labour force but operates below its potential.

It estimated post-harvest losses at between 30 and 40 per cent for many food commodities, blaming inadequate processing and storage facilities, weak cold-chain infrastructure and limited access to mechanisation and certified inputs.

The group said expanding agro-processing and integrated value chains could reduce food insecurity, create manufacturing jobs and cut Nigeria’s import bill, identifying cassava, rice, cocoa, sesame and soya as commodities with high-value export potential.

It added that digital technology could boost productivity across agriculture, manufacturing and logistics through precision agriculture, digital payments and technology-driven supply chains.

The 32nd Nigerian Economic Summit, themed “Growth that Works: Delivering Jobs, Productivity and Shared Prosperity,” will be held on October 26 and 27, 2026, at the Transcorp Hilton Hotel, Abuja.

The “Produce Nigeria” dialogue will bring together manufacturers, agro-industrialists, investors, policymakers and innovators to discuss how Nigeria can move from dependence on primary production towards higher-value industrial production.