Manufacturing GDP rises 3.3% to N4.13trn in Q2 2026, but quarterly output drops 15.9%

Nigeria's manufacturing sector contributed N4.128 trillion to Gross Domestic Product in the second quarter of 2026, a 3.3 percent year-on-year rise from the N3.998 trillion recorded in Q2 2025. The National Bureau of Statistics data, however, showed output fell 15.9 percent quarter-on-quarter from N4.906 trillion in Q1 2026, exposing the structural pressures still weighing on manufacturers.

Real manufacturing growth stood at 3.24 percent in Q2 2026, marginally below the 3.29 percent posted in Q1 2026.

Confidence up, but on expectations

The Manufacturers Association of Nigeria's Q2 2026 Manufacturers' CEOs Confidence Index rose to 52.1 points, up from 48.7 points in Q1 2026, pointing to improved business sentiment. MAN cautioned that the improvement was driven more by expectations for Q3 2026 than by actual Q2 operating conditions.

MAN Director-General Segun Ajayi-Kadir said the wider industrial picture was troubling. Overall industrial growth nearly halved from 7.46 percent in Q2 2025 to 3.96 percent in Q2 2026.

"We must raise a critical alarm about the precipitous plunge in overall industrial growth, which has nearly halved, from a robust 7.46 per cent in Q2'25 to a troubling 3.96 per cent in Q2'26," he said.

He blamed the erosion largely on the electricity, gas, steam and air-conditioning supply segment, which contracted 10.63 percent in the quarter. Ajayi-Kadir also flagged the fall in manufacturing's share of real GDP, from 9.57 percent in Q1 2026 to 7.72 percent in Q2 2026. That decline, he said, "highlights severe cost pressure, a high exchange rate, outrageous interest rates and exorbitant electricity tariffs facing domestic manufacturers."

He argued that the 3.24 percent year-on-year expansion masked a worrying structural weakness, with manufacturing still lagging broader economic activity. For him, the Q2 GDP numbers confirm that sustainable national prosperity must be anchored in active domestic manufacturing, not just service consumption and extraction.

Heavy industry leads, labour-intensive units lag

Growth was concentrated in capital-intensive segments. Oil refining expanded 43.94 percent and cement grew 12.75 percent, reflecting higher domestic refining capacity and stronger local value addition.

Labour-intensive segments struggled. Textile, apparel and footwear, which account for 22.95 percent of manufacturing real GDP, contracted 1.23 percent. Motor vehicles and assembly declined 1.02 percent. Food, beverage and tobacco, the largest manufacturing group with a 36.58 percent share, grew 2.79 percent, held back by weak consumer purchasing power and persistent food inflation.

Analysts see resilience, warn on costs

Centre for the Promotion of Private Enterprise chief executive Muda Yusuf described the 3.24 percent growth as resilient given continuing energy, financing and logistics pressures. He noted that food, beverages and tobacco grew 2.79 percent, electrical and electronics 1.51 percent, and non-metallic products 2.17 percent.

"Although these rates moderated, they confirm that productive activity is still expanding and could respond strongly to a reduction in structural costs," Yusuf said.

He called for an accelerated turnaround in the power sector, describing electricity reform as a central pillar of Nigeria's industrial and investment strategy. He also pushed for targeted support for high-employment value chains, including agro-processing, textiles and garments, pharmaceuticals, automotive components, basic metals, chemicals, construction materials and light manufacturing.

The mixed numbers matter for the naira. Heavy refining and cement output support local production and reduce import demand, while weak textiles, autos and food processing keep pressure on consumer prices and foreign exchange earnings. Until electricity tariffs, interest rates and exchange rate volatility ease, the recovery manufacturers are banking on will stay fragile.