Northeast Industrial Crisis Deepens as Insecurity Forces Closure of 60% of Factories — MAN

By The Ameh News | Analytics Feature Report

Nigeria’s manufacturing sector is facing one of its gravest regional crises as the Manufacturers Association of Nigeria (MAN) has revealed that approximately 60 percent of industries in the Northeast have ceased operations due to persistent insecurity, raising fresh concerns about economic stability, job creation, and industrial development across the region.
The alarming disclosure was made by the Director-General of MAN, Dr. Segun Ajayi-Kadir, during a meeting with members of the Commerce and Industry Correspondents Association of Nigeria (CICAN) at the association’s headquarters in Lagos.
His remarks paint a troubling picture of a region once regarded as a strategic commercial and manufacturing corridor but now struggling under the weight of insurgency, banditry, kidnapping, and other violent criminal activities that continue to undermine productive economic activities.
A Manufacturing Base Under Siege
According to Ajayi-Kadir, insecurity has evolved from a social challenge into a major economic threat, forcing manufacturers to either relocate, suspend operations, or permanently shut down factories.
The consequences have been devastating.
Industrial estates that once housed thriving manufacturing concerns are now largely abandoned, while businesses that managed to survive face escalating operational costs arising from disrupted logistics, damaged infrastructure, higher insurance costs, and increased expenditure on private security.
“The Northeast has suffered enormously from insecurity. About 60 percent of industries in the region have shut down, while many others have been displaced,” Ajayi-Kadir said.
Industry analysts note that the Northeast’s strategic importance to Nigeria’s industrial ecosystem cannot be overstated. The region serves as a gateway to neighboring West and Central African markets and possesses vast agricultural resources capable of supporting agro-processing, food manufacturing, textiles, and other value-added industries.
However, years of insecurity have significantly eroded those advantages.
The Economic Cost of Industrial Displacement
The closure of factories extends far beyond lost corporate revenues.
Manufacturing remains one of the largest sources of formal employment in Nigeria, and the shutdown of industrial facilities across the Northeast has triggered widespread job losses, worsening poverty and social instability.
Economists warn that every manufacturing job lost often affects several indirect jobs within supply chains, transportation networks, distribution channels, and informal support services.
The decline in industrial activity has also reduced internally generated revenues for state governments while limiting opportunities for youth employment, a critical factor in addressing insecurity itself.
Analysts argue that the vicious cycle is becoming increasingly evident:
Insecurity discourages investment.
Reduced investment weakens industrial growth.
Rising unemployment fuels poverty.
Poverty creates conditions that can further worsen insecurity.
The result is a dangerous feedback loop that threatens long-term regional development.
Investors Choosing Safer Destinations
Beyond factory closures, MAN’s leadership highlighted growing investor apprehension toward the region.
Many manufacturers are reluctant to commit fresh capital to the Northeast amid concerns over the safety of personnel, facilities, equipment, and supply chains.
The situation has led to a gradual migration of industrial investments toward regions perceived as safer, thereby widening economic disparities across the country.
For investors, security remains one of the most important determinants of business location decisions.
Without confidence that factories can operate without disruption, industrial expansion plans are unlikely to materialize regardless of the availability of raw materials or market opportunities.
According to industry observers, restoring investor confidence will require a combination of improved security architecture, infrastructure rehabilitation, and targeted economic incentives.
Why Security Matters to Industrialisation
Ajayi-Kadir emphasized that no meaningful industrial transformation can occur in an atmosphere of persistent insecurity.
He called on the Federal Government and security agencies to intensify efforts aimed at restoring peace and stability across the Northeast, arguing that economic recovery and industrial revival depend largely on improved security conditions.
His position aligns with global development experience, which shows that regions experiencing prolonged conflict often suffer substantial declines in manufacturing productivity, foreign direct investment, and economic competitiveness.
For Nigeria’s Northeast, improved security could unlock significant opportunities in:
Agro-processing and food manufacturing.
Textile and garment production.
Solid minerals processing.
Export-oriented manufacturing.
Regional trade and logistics.
Such opportunities remain largely untapped because of security concerns.
Rebuilding the Northeast Industrial Base
Beyond security interventions, MAN is advocating comprehensive support measures to help affected manufacturers recover.
Ajayi-Kadir urged policymakers to implement targeted programmes focused on:
Industrial infrastructure development.
Access to affordable financing.
Tax incentives for affected businesses.
Support for displaced manufacturers.
Enhanced transportation and logistics networks.
Experts believe these interventions could accelerate the return of industries that have either scaled down operations or relocated entirely.
They also argue that rebuilding industrial capacity will be essential for achieving broader national objectives, including economic diversification, employment generation, and non-oil export growth.
Tinubu’s Reforms: Progress Amid Challenges
While highlighting the challenges facing manufacturers, Ajayi-Kadir acknowledged ongoing efforts by President Bola Ahmed Tinubu to reposition Nigeria’s economy through various reform initiatives.
According to him, some policy measures introduced by the administration have started producing encouraging outcomes.
However, he cautioned that many Nigerians have yet to experience the full benefits of the reforms due to the activities of economic saboteurs and structural bottlenecks that continue to impede economic growth.
His comments reflect a broader sentiment within the business community that while reforms may be necessary, implementation challenges often delay their positive impact on businesses and consumers.
Dangote Refinery Seen as Strategic Buffer
Ajayi-Kadir also commended the role of the Dangote Refinery, describing it as a strategic national asset.
He noted that the refinery’s operations have provided considerable relief amid uncertainties generated by geopolitical tensions in the Gulf region, which could otherwise have exerted significant pressure on domestic petroleum prices.
Industry experts agree that increased local refining capacity could help reduce Nigeria’s exposure to international fuel supply disruptions while strengthening industrial competitiveness through more stable energy costs.
Tax Reform: Opportunity and Risk
On the country’s evolving tax framework, the MAN Director-General welcomed ongoing reforms but warned that poor implementation could undermine industrial growth.
Manufacturers have consistently advocated tax policies that encourage production, investment, and business expansion rather than increasing the cost burden on enterprises already grappling with multiple economic challenges.
The success of the new tax regime, he argued, will ultimately depend on transparency, stakeholder engagement, and effective implementation mechanisms.
Media Partnership and Made-in-Nigeria Campaign
Ajayi-Kadir reaffirmed MAN’s commitment to defending the interests of manufacturers and promoting policies that enhance industrial growth nationwide.
He also described the media as a critical partner in national development, pledging continued collaboration with CICAN to advance public understanding of economic and industrial issues.
Earlier, CICAN Chairman Alhaji Taiwo Hassan said the association’s visit was aimed at strengthening its longstanding relationship with MAN.
He further disclosed plans by CICAN to intensify advocacy for the Made-in-Nigeria campaign, a movement designed to encourage patronage of locally manufactured products, support domestic industries, and stimulate national economic development.
Analysis: A National Economic Emergency in the Northeast
The revelation that six out of every ten factories in the Northeast have shut down should serve as a wake-up call for policymakers.
Beyond the security implications, the crisis represents a major threat to Nigeria’s industrialisation agenda, regional economic integration, and employment generation targets.
Without urgent intervention, the Northeast risks further economic marginalisation, deeper poverty, and continued capital flight.
Conversely, a successful restoration of security combined with targeted industrial recovery programmes could transform the region into one of Nigeria’s most important manufacturing and export hubs.
For Nigeria, the challenge is clear: security and industrialisation must advance together. One cannot succeed without the other.
MAN Director-General Segun Ajayi-Kadir says insecurity has forced the closure of 60% of factories in Nigeria’s Northeast, triggering job losses, investor flight, and economic decline. Industry leaders call for urgent government intervention to revive the region’s industrial base.
Manufacturers Association of Nigeria warns that insecurity has shut down 60% of industries in the Northeast, threatening jobs, investments, and economic growth. Experts call for urgent security and industrial recovery measures.