“Manufacturing Key to Nigeria’s Survival — Ajayi-Kadir”

At the 2025 BusinessDay Manufacturing Conference, MAN’s Director General calls for urgent reforms to unlock Nigeria’s manufacturing potential, warning of dire consequences if structural challenges persist.

Segun Ajayi-Kadir, mni, Director General  MAN

Delivering a hard-hitting keynote address at the 2025 BusinessDay Manufacturing Conference held at the Oriental Hotel, Victoria Island, Lagos, Segun Ajayi-Kadir, mni, Director General of the Manufacturers Association of Nigeria (MAN), urged immediate policy and structural reforms to revitalize Nigeria’s ailing manufacturing sector.

Speaking on the theme, “Unlocking Nigeria’s Manufacturing Potential: Strategies for Sustainable Growth Amid Economic Turbulence,” Ajayi-Kadir warned that Nigeria’s industrial future is at risk if the country fails to act decisively in addressing macroeconomic instability, policy inconsistencies, and infrastructural decay.

“Unlocking the evident potential of Nigeria’s manufacturing sector is not just an economic imperative — it is a strategic necessity,” Ajayi-Kadir said.

A Global Context for Local Realities

Ajayi-Kadir opened his address with a sobering global economic overview, pointing to mounting geopolitical uncertainty, disrupted supply chains, and policy shifts in major economies. The global GDP growth forecast has now been revised downward from 3.3% to 2.8% by the IMF — the lowest in five years — largely due to ripple effects from the return of protectionist policies in the U.S. under a Trump 2.0 presidency.

Against this volatile backdrop, countries with robust manufacturing capabilities — including China, the U.S., Germany, India, South Korea, and Malaysia — are better positioned to weather global shocks. Together, these nations account for 60% of global manufacturing output.

In contrast, Africa’s leading economies — Egypt, Nigeria, and South Africa — contribute just under half of the continent’s manufacturing output, with Nigeria’s manufacturing value-added standing at $55.9 billion.

Manufacturing: Nigeria’s Engine, Running on Empty

Despite contributing ₦37.49 trillion to Nigeria’s market size in 2024 (13.9% of the total market and 8.64% of real GDP), the manufacturing sector is operating far below its capacity. It employs an estimated 12.7 million people and generated over $6.7 billion in exports in 2019 — a figure that has since declined to $1.51 billion in 2024.

Tax contributions from manufacturers reached ₦578.39 billion in VAT and ₦626.42 billion in corporate income tax last year. The sector also attracted $1.59 billion in foreign investment in 2023, highlighting its potential as a forex and job creation engine.

Yet these gains are being eroded.

“Despite its critical role, Nigeria’s manufacturing sector remains crippled by macroeconomic headwinds, deficient infrastructure, and inadequate policy support,” Ajayi-Kadir stated.

A Sector in Distress: The Hard Numbers

Ajayi-Kadir laid out grim statistics:

• Capacity utilization fell from 73.3% in 1981 to just 57% in 2024.
• Sectoral GDP contribution dropped from 29.9% to 8.6% over the same period.
• Real growth plunged from 14.7% in 2014 to 1.38% in 2024.
• Non-oil exports shrank from 82.37% in 2019 to 25.13% in 2024.
• Company closures: 767 firms exited in 2023; 18,000 jobs were lost in 2024 alone.

Exchange rate depreciation of 53% and a 118% increase in raw material import costs drove manufacturers’ forex losses up to ₦1.62 trillion in 2024 — up from ₦983 billion the year prior. Compounding this, the Central Bank’s failure to settle $2.4 billion in forex forwards has further destabilized planning and operations.

The SMI (Small and Medium Industries) segment bore the brunt, with electricity tariff hikes of 240% driving energy costs to ₦1.1 trillion — up from ₦781.7 billion in 2023.

Core Constraints Crippling the Sector

Ajayi-Kadir outlined persistent bottlenecks:

• Energy: Erratic supply and soaring off-grid energy costs.
• Finance: Credit access worsened; interest rates hit 35.5% in 2024, compared to 8% in South Africa.
• Policy instability: Inconsistent incentives and trade policies frustrate long-term investment.
• Logistics: Poor infrastructure and over 50 checkpoints between Lagos and the Seme border inflate costs.
• Security: Insurgency and banditry force manufacturers out of conflict-prone areas, especially the North.
• Smuggling: Cheap, substandard imports crowd out local producers, especially in textiles and electronics.
• Infrastructure: Nigeria’s 200,000km road network serves over 230 million people, but only 37% of roads are motorable.

“From electricity tariffs to multiple taxation, the costs of doing business are simply unsustainable,” he said. “The current economic environment is not just hostile — it is stifling.”

A Call to Action

Ajayi-Kadir called on the Nigerian government to prioritize industrialization through:

• Consistent policy and regulatory frameworks,
• Investment in transport and power infrastructure,
• Improved access to long-term financing,
• Enhanced local sourcing of raw materials,
• Protection against dumped and substandard goods,
• Streamlined regulatory processes.

He acknowledged efforts by the current administration to boost production and reform the operating environment but urged for more urgency and cohesion.

“It is during times of turbulence that true leadership is tested. We must demonstrate bold vision and decisive action,” he concluded, invoking the African proverb, “Smooth seas do not make skillful sailors.”

The 2025 BusinessDay Manufacturing Conference may well go down as a watershed moment — not for what was promised, but for the urgent truth laid bare. Nigeria’s manufacturing sector is teetering. But with coordinated reforms, strategic investment, and strong political will, it can yet become the anchor of Nigeria’s economic recovery and global competitiveness.