NESG faults financing, energy costs for industrial decline

The Nigerian Economic Summit Group has expressed concern over the decline of Nigeria's manufacturing sector, attributing it to high energy costs, import competition, insufficient financing and weak industrial coordination. In a statement ahead of the 32nd Nigerian Economic Summit, the group noted that manufacturing, which should drive the country's structural transformation, has instead experienced a relative decline.

Nigeria continues to export raw materials while importing finished products, despite its vast natural resources, large population and domestic market of over 220 million consumers. This situation has suppressed value creation, constrained employment and left economic growth vulnerable to commodity price cycles, according to the NESG.

The group identified underinvestment in infrastructure, inefficient regulation, weak institutional capacity and inadequate capital flows as key factors contributing to productivity problems in the manufacturing sector. Energy costs, particularly electricity, are cited as the primary operational constraint for manufacturers in Nigeria.

The group also blamed import competition, particularly from subsidized goods, for undermining domestic producers. To address these challenges, the NESG proposed measures such as Special Economic Zones, fiscal incentives for value-added production and local content frameworks to create market opportunities for domestic producers.

The summit will also explore development finance instruments, blended finance, and risk-sharing mechanisms to support productive-sector lending. Agriculture is identified as a significant opportunity for industrialization, with the potential to reduce food insecurity, create manufacturing jobs and lower Nigeria's import bill.