Despite GDP growth, industrial sector plunges — MAN

The Manufacturers Association of Nigeria (MAN) has expressed deep concern over the rapid decline in Nigeria’s industrial sector, despite an overall growth in the country's Gross Domestic Product (GDP). According to MAN’s Director-General, Segun Ajayi-Kadir, industrial real growth plummeted from 7.46 percent in Q2 2025 to 3.96 percent in Q2 2026, signaling a nearly halved performance.

This drop in industrial growth, while overall GDP expanded by 4.43 percent in the same period, suggests a disconnect between macroeconomic figures and the actual health of the industrial sector, particularly manufacturing. Ajayi-Kadir noted that services now account for 56.62 percent of GDP, while manufacturing contributes only 17.23 percent, highlighting the struggling industrial sector's plight.

The Electricity, Gas, Steam, and Air Conditioning Supply sub-sector saw the steepest decline, contracting by 10.63 percent in Q2 2026. Meanwhile, manufacturing's share of real GDP fell from 9.57 percent in Q1 2026 to 7.72 percent in Q2 2026, signaling a severe cost pressure, high exchange rates, and exorbitant electricity tariffs that are choking domestic manufacturers.

Although manufacturing recorded a 3.24 percent growth year-on-year, its shrinking relative contribution to GDP underscores its lagging recovery compared to the broader economy. Factors such as declining household purchasing power, persistent food inflation, and the lack of industrial energy security and affordable credit exacerbate the situation.

To address these issues, MAN has called for urgent actions, including improving industrial energy security, reducing credit costs, ensuring predictable foreign exchange access for manufacturers, and implementing measures like Eligible Customer status for industrial clusters and a matching-grant facility for those investing in solar photovoltaic systems.