Nigeria’s Untapped Manufacturing Opportunities Worth ₦40trn — Report

Nigeria’s manufacturers failed to serve about $29.4 billion of local demand in 2025, a gap worth more than N40 trillion at 2025 exchange rates, according to a new report.

The Nigerian Manufacturing Opportunity Report 2026, published by SEID, a communications and market intelligence firm, releases on Tuesday, showed that imports supplied 64 per cent of local demand for manufactured goods last year. It describes the gap as a supply problem, not a demand problem.

Manufactured goods also made up about 53 per cent of Nigeria’s total import bill, the report said.

According to the report, manufacturing’s contribution to gross domestic product fell from 8.42 per cent in 2023 to 8.05 per cent in 2025. That is roughly half the 15 per cent the Nigeria Industrial Policy targets for 2030.

Sector output grew by only 1.4 per cent in 2025. Growth picked up to 3.3 per cent in the first half of 2026, from 1.6 per cent a year earlier. The report said almost 90 per cent of that gain came from cement and food processing.

Export intensity has also weakened. Nigeria’s manufacturing export intensity stood at 3.53 per cent in 2024, down from 6.39 per cent in 2021, against 19.29 per cent for sub-Saharan Africa.

Light manufacturing and packaging has the largest gap. Imports supplied 80 per cent of a $15.90 billion market, including $7.75 billion of machinery, components and equipment. Domestic producers met about 20 per cent of demand.

In textiles, apparel and leather, local production grew 5.8 per cent between 2024 and 2025, while imports rose 53.8 per cent. Import penetration increased from 10.5 per cent to 14.6 per cent. The report blamed costly imported inputs and smuggled finished goods that set selling prices.

Chemicals and pharmaceuticals recorded $4.25 billion in imports and depend heavily on imported active pharmaceutical ingredients. The report put medical inflation at about 30 per cent.

In construction inputs, base metals and fabricated metal products accounted for 91 per cent of the import basket. Cement, by contrast, earned over $57 million in exports in 2024.

Food and agro-processing is a $10.93 billion market and Nigeria’s strongest manufacturing export segment. Post-harvest losses of ₦3.5 trillion to ₦5 trillion a year, or $2 billion to $3 billion, still limit processors.

The report said the Nigeria First directive, the Nigeria Industrial Policy 2025, fiscal reforms and the NNPC Gas Master Plan are gradually shifting production economics in favour of local manufacturers. It said firms that move early in import-dependent value chains stand to gain market share.

It also called reliable energy, logistics, industrial parks and technical skills investment priorities that will decide whether local producers can compete on cost and scale.

The report said about $3.9 billion of the $29.4 billion falls outside the five subsectors it profiled.