The Nigerian manufacturing sector is facing a perfect storm of economic challenges, with soaring inflation, a depreciating naira, and high interest rates severely impacting production and profitability. According to the Manufacturers Association of Nigeria (MAN), the inventory of unsold goods swelled to N1.4 trillion in the second half of 2024, a 12.9% increase from the previous six months, reflecting dwindling consumer demand.
“Inflation reached an alarming 34.8% by December 2024, eroding consumers’ purchasing power and significantly impacting demand for manufactured goods,” stated Francis Meshioye, President of MAN, during the 2025 Presidential Media Luncheon in Lagos. “This, coupled with the devaluation of the naira and the surge in electricity tariffs, has severely strained the sector’s profitability.”
The depreciation of the naira, which plummeted from N666 to the dollar in mid-2023 to over N1700 by mid-2024, has significantly increased the cost of imported raw materials. Simultaneously, high interest rates, peaking at 27.7% in November 2024, have made it increasingly difficult for manufacturers to access financing for expansion and modernization.
These challenges have taken a toll on the sector’s contribution to the nation’s GDP, which declined from 16.04% in Q4 2023 to 12.68% in Q2 2024.
MAN Calls for Urgent Government Intervention
To navigate these turbulent waters, MAN has urged the government to take decisive action. This includes:
– Taming Inflation: Implementing measures to curb inflation and stabilize the naira.
– Promoting Local Production: Enforcing the patronage of made-in-Nigeria products policy.
– Improving Infrastructure: Upgrading roads, railways, and energy infrastructure, including a review of electricity tariffs.
– Addressing Food Security: Promoting local sourcing of raw materials and ensuring food security.
“There is no gainsaying the fact that manufacturing is pivotal to galvanizing and sustaining the economic growth and development of Nigeria,” emphasized Meshioye. “We seek the government’s alignment with our conviction that a win for the manufacturing sector is a win for the economy and, by extension, a better life for the citizenry.”
Credit: Businessday (Text Excluding Headline)
