Nigeria’s manufacturing sector is facing renewed pressure as exports fell sharply by ₦746.38 billion in the first quarter of 2025, dealing a blow to the Federal Government’s efforts to stimulate non-oil revenue through industrial output.
According to the latest foreign trade report by the National Bureau of Statistics (NBS), manufacturing exports declined from ₦1.04 trillion in Q3 2024 the last recorded peak to ₦294.43 billion in Q1 2025, representing a staggering 71.76% drop over two quarters. Quarter-on-quarter, the sector saw a 40.43% fall, sliding from ₦494.22 billion in Q4 2024.
Reacting to the grim figures, Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, attributed the slump to rising borrowing costs and broader macroeconomic instability, particularly the 27.5% monetary policy rate, which he described as “crippling” for the sector.
“The government’s tight monetary policy stance has consistently eroded manufacturers’ access to affordable credit,” Ajayi-Kadir told journalists. “At a rate of 27.5%, borrowing has become practically unsustainable for most players in the sector. That has persisted, and it is taking a toll.”
He acknowledged that inflation is beginning to stabilise and foreign exchange pressures have somewhat eased, but stressed that these improvements have not translated into meaningful growth for manufacturers. “Despite a few positives, manufacturing performance remains stagnant,” he said.
The dismal Q1 2025 performance follows a downward spiral that began in Q4 2024, when exports dropped by 52.48% from the previous quarter. While there was a year-on-year improvement of 9.58% from ₦268.70 billion in Q1 2024, the sector’s trajectory remains concerning.
In a statement issued in May, Ajayi-Kadir described the state of the manufacturing industry as “sub-optimal,” citing a wide range of systemic challenges: unstable exchange rates, erratic power supply, high energy costs, inflation, insecurity, overlapping regulatory frameworks, limited access to credit, and poor infrastructure.
He revealed that over 767 manufacturing firms shut down operations in 2023, while more than 18,000 jobs were lost in 2024 alone, underscoring the depth of the sector’s struggles. “The environment remains hostile for industrial growth,” he said.
Despite Nigeria’s overall trade surplus of ₦5.17 trillion in Q1 2025, the manufacturing sector’s contribution continues to falter. The NBS data showed that total exports grew by 7.42% year-on-year to ₦20.59 trillion, and by 2.92% quarter-on-quarter from ₦20.01 trillion in Q4 2024.
Non-oil exports accounted for ₦3.17 trillion, making up 15.38% of total exports. This was a slight improvement from ₦2.84 trillion (14.20%) in Q4 2024.
However, imported manufactured goods were valued at ₦7.51 trillion, down 11.35% from ₦8.47 trillion in the previous quarter but still 30.90% higher than the ₦5.74 trillion recorded in Q1 2024.
In total, manufactured goods trade in Q1 2025 was ₦7.80 trillion, representing 21.67% of total trade, a decline from ₦8.97 trillion in Q4 2024 (24.5% of total trade).
The NBS report showed that Asia remained the top destination for Nigeria’s manufactured exports, receiving ₦103.34 billion worth of goods, followed by Africa (₦83.13 billion) and Europe (₦75.71 billion). Key exports included unwrought aluminium alloys (₦33.73 billion to Japan, ₦4.25 billion to China), dredgers to Spain (₦37.23 billion), and cathodes to Japan and South Korea (₦11.34 billion and ₦8.59 billion respectively).
On the import side, motorcycles and CKDs from India topped the list at ₦146.11 billion, followed by telecommunications equipment from China (₦120.15 billion) and the U.S. (₦12.06 billion). Other notable imports included polypropylene from Saudi Arabia (₦83.31 billion) and herbicides from China and India, valued at ₦132.81 billion and ₦2.71 billion respectively.
As policymakers push to diversify the economy and reduce reliance on oil, the latest data serves as a stark reminder that Nigeria’s manufacturing sector continues to face deep-rooted challenges and urgently needs targeted policy support to recover and grow.
