Nigeria’s manufacturing sector continues to battle severe headwinds, shedding 18,935 jobs in the first half (H1) of 2025, up from 10,891 in the same period of 2024.
According to the Manufacturers Association of Nigeria (MAN) in its Manufacturing State of Affairs Report, released yesterday, the sector’s woes were compounded by galloping inflation, soaring exchange rates, and crippling energy costs.
The report showed that unsold inventory rose to ₦1.04 trillion in H1 2025, compared to ₦896.2 billion in H2 2024, while Manufacturing Value Added (MVA) plunged to $25.36 billion from $55.9 billion in 2023.
Average lending rates climbed to 36.6 per cent, with limited access to credit totaling ₦7.72 trillion, further stifling production and investment.
Despite the downturn, capacity utilisation slightly improved to 61.3 per cent from 57.6 per cent in H2 2024, while manufactured exports surged from ₦294.4 billion in Q1 to ₦803.8 billion in Q2 2025.
MAN’s CEO Confidence Index (MCCI) also recorded a modest rise of 0.4 points to 50.7, even as real output growth slipped marginally to 1.6 per cent, contributing 7.81 per cent to the nation’s GDP.
MAN’s Director of Research and Economic Policy, Oluwasegun Osidipe, highlighted that manufacturers spent ₦676.6 billion on alternative energy and ₦1.72 trillion on imported raw materials in H1 2025.
He blamed the declining state of the sector on a “hostile macroeconomic environment” marked by FX losses, high borrowing costs, multiple taxation, poor infrastructure, insecurity, and excessive regulation.
The report noted mixed performance across industrial zones. Nine zones, including Imo/Abia, Ikeja, Kaduna, and Rivers/Bayelsa, recorded improved confidence due to steadier FX access and easing inflation, while others such as Apapa, Edo/Delta, and Ogun faced setbacks from logistics bottlenecks, power outages, and port frictions that raised operating costs and delayed production.
Key challenges identified by manufacturers include unstable power supply, FX scarcity, high energy and raw material costs, multiple taxation, and poor access to credit.
Others are weak road infrastructure, excessive regulation, and high import duties, all of which have eroded competitiveness and production efficiency.
MAN’s Director-General, Segun Ajayi-Kadir, urged the Federal Government to prioritise exchange rate stability, oil production recovery, and fiscal discipline to sustain modest economic gains.
“Manufacturing remains the heartbeat of sustainable recovery,” he said. “No nation prospers on consumption alone — Nigeria must produce what it consumes and export what it produces to drive inclusive growth and lasting prosperity.”