NESG raises the alarm over Nigeria’s manufacturing decline

The Nigerian Economic Summit Group (NESG) has issued a warning about the decline of Nigeria's manufacturing sector, citing energy costs, import competition, inadequate financing, and weak industrial coordination as the primary culprits. The NESG noted that the manufacturing sector's contribution to GDP is on the decline and has failed to develop the necessary linkages seen in industrializing economies.

Despite possessing abundant natural resources, a large population, and a domestic market of over 220 million consumers, Nigeria exports raw materials and imports finished goods. The NESG emphasized that this structural imbalance has suppressed value creation, constrained employment, and exposed economic growth to commodity price cycles.

The group's analysis of challenges faced by manufacturers highlighted crippling energy costs, particularly electricity as a major constraint, and the impact of import competition, especially from subsidized goods. They also pointed out the absence of an integrated industrial policy, which left manufacturers without the coordinated support available in similar economies.

The NESG proposed several measures to restore manufacturing competitiveness, including Special Economic Zones, fiscal incentives for value-added production, and local content frameworks. They also identified agriculture as a significant opportunity for industrialization, citing its employment of 36% of Nigeria's workforce but operating at below potential due to inadequate processing and storage facilities.

The NESG's upcoming 32nd Nigerian Economic Summit, themed "Growth that Works: Delivering Jobs, Productivity and Shared Prosperity," aims to discuss strategies to transition Nigeria from a primary production-based economy to one focused on higher-value industrial production.