Report: Manufacturing Remains Largest Contributor to Nigeria’s Industrial Output, Employment
Dike Onwuamaeze A report released by the Nigerian Economic Summit Group (NESG) has stated that the manufacturing sector has grown to become the largest contributor to industrial output, with its
A recent report by the Nigerian Economic Summit Group (NESG) has revealed that the manufacturing sector has emerged as the leading contributor to industrial output and employment in Nigeria. In the first quarter of 2026, the sector's share rose to 50.1 percent from just 28.2 percent in 2010. Manufacturing alone accounts for 76.5 percent of total industrial employment, up from 73.2 percent in 2017.
Construction and oil & gas follow as the second and third largest contributors, making up 23.8 percent and 21.1 percent of industrial output, respectively. Despite this growth, manufacturing still only contributes less than 10 percent to Nigeria's real GDP, with poor capacity utilization and sluggish productivity being the main reasons.
The sector's limited competitiveness is evident in its low share of manufactured goods in exports and intra-African trade. To fully benefit from the African Continental Free Trade Area (AfCFTA), Nigeria must prioritize a manufacturing-led structural transformation. This will require reducing reliance on crude oil exports, expanding domestic value addition, and promoting manufacturing-led non-oil exports to diversify export markets and boost economic growth.
Limited access to finance, high borrowing costs, and weak loan recovery mechanisms are major constraints for the manufacturing sector, which only receives 1.5 percent of total foreign investment.
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