NESG raises the alarm over Nigeria’s manufacturing decline

The Nigerian Economic Summit Group (NESG) is warning that Nigeria's manufacturing sector is declining, attributing the issue to high energy costs, competition from imports, insufficient financing, and poor coordination of industrial efforts. The NESG argues that manufacturing should be the sector driving Nigeria's structural transformation, yet it has seen a relative decline, contributing a shrinking share of the country's GDP.

Despite the nation's abundant natural resources and large population, Nigeria continues to export raw materials while importing finished goods, indicating a structural imbalance that has stifled value creation and employment opportunities. The group highlights that the country's productivity problems are not temporary but stem from years of inadequate investment in infrastructure, inefficient regulations, weak institutional capacity, and insufficient capital flowing to productive sectors.

Specific challenges faced by manufacturers include crippling energy costs, particularly electricity, which is frequently cited as the primary operational constraint for manufacturers. Import competition, especially from subsidized goods, has also undermined domestic producers. NESG recommends measures to restore manufacturing competitiveness, including the establishment of Special Economic Zones, fiscal incentives for value-added production, and targeted industrial financing frameworks.

They also call for reforms in financial services, real estate, and trading to encourage capital allocation towards manufacturing plants, agro-processing facilities, and industrial infrastructure that require long-term financing. Additionally, the NESG identifies agriculture as a significant opportunity for industrialization, noting that the sector employs 36% of Nigeria's labor force but operates below its potential.

They estimate post-harvest losses to be between 30 and 40% for many food commodities, driven by insufficient processing and storage facilities, weak cold-chain infrastructure, and limited access to mechanization and certified inputs. The NESG suggests that expanding agro-processing and integrated value chains could reduce food insecurity, create manufacturing jobs, and decrease Nigeria's import bill, highlighting commodities like cassava, rice, cocoa, sesame, and soya as high-value export potential.

The 32nd Nigerian Economic Summit, themed "Growth that Works: Delivering Jobs, Productivity and Shared Prosperity," is scheduled to take place on October 26 and 27, 2026, at the Transcorp Hilton Hotel in Abuja. The summit's "Produce Nigeria" dialogue will convene manufacturers, agro-industrialists, investors, policymakers, and innovators to explore strategies for transitioning Nigeria from a primary production-dependent economy to one focused on higher-value industrial production.