NESG Warns Nigeria's Manufacturing Sector Is Slipping as Summit Nears
By Aboki Forex —
The Nigerian Economic Summit Group (NESG) has raised the alarm over the decline of Nigeria's manufacturing sector, blaming high energy costs, import competition, inadequate financing and weak industrial coordination for the country's poor productive capacity.
In a statement issued on Sunday ahead of the 32nd Nigerian Economic Summit, the group warned that manufacturing, which should drive Nigeria's structural transformation, had instead suffered a relative decline.
"In manufacturing, the sector contributes a declining share of GDP and has failed to develop the deep backward and forward linkages that characterise industrialising economies," the NESG said.
The group noted that Nigeria continues to export raw materials and import finished products despite its vast natural resources, large population and a domestic market of more than 220 million consumers. It called this a fundamental structural imbalance that has suppressed value creation, constrained employment and left economic growth exposed to commodity price cycles.
The NESG said the productivity problems are not temporary. They stem from years of underinvestment in infrastructure, inefficient regulation, weak institutional capacity and inadequate capital flows to productive sectors.
Energy costs and import competition
On the pressures facing manufacturers, the group was blunt: "Energy costs remain crippling, with manufacturers frequently citing electricity as their single largest operational constraint. Import competition, particularly from subsidised goods, has undermined domestic producers."
It also blamed the absence of an integrated industrial policy, saying local manufacturers lack the coordinated support that producers in comparable economies receive through tariff structures, local content requirements and targeted industrial financing.
According to the NESG, the summit will examine measures to restore manufacturing competitiveness, including Special Economic Zones, fiscal incentives for value-added production and local content frameworks capable of creating market opportunities for domestic producers.
Capital keeps flowing to quick returns
The group raised concerns over how capital is allocated in the economy. Investment has historically flowed into sectors offering quicker returns while manufacturing and other productive activities remain underfunded.
Financial services, real estate and trading have attracted capital, while manufacturing plants, agro-processing facilities and industrial infrastructure requiring long-term financing struggle to secure investment.
"This misallocation of capital is both a market failure and a policy failure, and it explains much of Nigeria's productivity stagnation," the NESG stated.
Discussions at the summit will consider development finance instruments, blended finance, risk-sharing mechanisms for productive-sector lending and reforms to incentives that favour extraction over production.
Agriculture as the industrialisation door
The NESG identified agriculture as a major opportunity, noting the sector employs about 36 per cent of Nigeria's labour force but operates below its potential.
It estimated post-harvest losses at between 30 and 40 per cent for many food commodities, blaming inadequate processing and storage facilities, weak cold-chain infrastructure and limited access to mechanisation and certified inputs.
Expanding agro-processing and integrated value chains could reduce food insecurity, create manufacturing jobs and cut Nigeria's import bill, the group said, naming cassava, rice, cocoa, sesame and soya as commodities with high-value export potential. It added that digital technology could lift productivity across agriculture, manufacturing and logistics through precision agriculture, digital payments and technology-driven supply chains.
The 32nd Nigerian Economic Summit, themed "Growth that Works: Delivering Jobs, Productivity and Shared Prosperity," will hold on October 26 and 27, 2026, at the Transcorp Hilton Hotel, Abuja. The "Produce Nigeria" dialogue will bring together manufacturers, agro-industrialists, investors, policymakers and innovators to discuss how Nigeria can move from dependence on primary production towards higher-value industrial production.
For Nigerian businesses, the warning matters on two fronts. A manufacturing base that keeps importing finished goods sustains demand for foreign exchange and keeps pressure on the naira, while weak local processing leaves exporters selling raw commodities at the mercy of global price cycles.