Juliet Onyema
Nigeria’s manufacturing sector grew by 1.6 percent in real terms in the second quarter of 2025, reflecting a stronger year-on-year performance compared to the same period in 2024, but lower than the previous quarter, as the sector continues to grapple with mixed signals of recovery.
Data from the National Bureau of Statistics (NBS) GDP report showed that the sector’s growth was higher than the 1.28 percent recorded in the same quarter of 2024 and lower than the 1.69 percent recorded in the preceding quarter by 0.47 percentage points and 0.09 percentage points, respectively.
The report also showed that the sector’s real contribution to GDP in the second quarter was 7.81 percent, lower than the 8.01 percent recorded in the same period of 2024 and lower than the 9.62 percent recorded in Q1 2025.
Frank Ike Onyebu, former chairman of Manufacturers Association of Nigeria (MAN), Apapa branch, told BusinessDay that manufacturers are yet to feel the effects of the sector’s growth, adding that a 1.6 percent year-on-year growth for Nigeria’s manufacturing sector is nothing to boast about.
“Nigeria has the potential to grow its manufacturing sector by as much as 10 percent year-on-year for the next couple of years if we choose to, because Nigeria’s manufacturing sector is still at its infancy. The potential for growth is inestimable,” Onyebu said.
While commending the government for a fairly stable exchange rate regime in the last couple of months, he said that he hopes this is sustainable and inflation materialises soon, “because thus far most people have not seen the effects of this slowdown in the prices of our everyday commodities,” Onyebu said
He said that, on the flip side, manufacturers have been locked in a constant struggle with government agencies bent on growing revenue at the expense of the real sector of the economy.
“We encounter the introduction of new regulations and taxes, coming in one form or the other, almost on a daily basis. These taxes, which originate from agencies starting from the ports, spread through the entire production value chain,” Onyebu explained.
According to him, the Manufacturers Association of Nigeria has spent considerable effort challenging these measures, but many are only suspended temporarily before resurfacing in another guise, creating uncertainty that discourages business growth.
“My advice to the government is to incentivise production to grow the economy. We all know that the government needs revenue to operate, but you cannot generate revenue from a dead company. Companies need to survive to pay taxes.
Read also: Manufacturing sector recovering amid reforms – MAN Chairman
“The government should create an enabling environment that would encourage more people to invest in manufacturing,” Onyebu said, noting that incentives, including tax holidays, infrastructural development, stable power supply, etc, should be put in place to enable massive investment in the sector.
“Give it a few years, and there will be real growth. You would have plenty of companies that are able and willing to pay taxes. Government revenues would grow naturally,” he said.
According to Muda Yusuf, director and chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), the manufacturing sector’s performance is largely a result of the lingering structural challenges in the economy, which have been affecting productivity.
Yusuf said that exposure to foreign exchange has become a big issue for the manufacturing sector because of the exchange rate depreciation.
He noted that if Nigeria wants improvement, the country needs to address issues of funding because the cost of funding is too high for manufacturers.
“We need to address the issue of the cost of imports. We need to address the issue of logistics,” Yusuf said, noting that it will generally impact the manufacturing sector’s performance.
“It is also hoped that with the current procurement policy of governments to patronise what is made in Nigeria and the whole idea of propagating Nigerian first, I think that disposition is likely to impact positively on the manufacturing sector going forward,” he said.
He added that increased investments in backward integration will be beneficial for the sector.
Source: Businessday.ng | Read the Full Story…
