•767 manufacturing companies shut down as at 2023, •Costs of imported raw materials surged by 118% •Costs on alternative energy hit N1.11trn in 2024
The challenges facing the nation’s manufacturing sector seem to be gradually taking their tolls on the economy.
For instance, in Year 2024 alone, over 18,000 jobs were said to have been lost; with a total of 767 companies shut down, as at 2023, due to the nation’s hostile business environment.
Making the disclosure at the Businessday Manufacturing 2025 Conference, held recently, in Lagos, the Director General of the Manufacturers’ Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, stated that besides the exchange rate depreciating by 53%, last year, the cost of imported raw materials also surged by 118% to ?6.64 Trillion, same year.
According to him, documented forex losses of member- manufacturers increased from N983 billion in 2023 to N1.62 Trillion, due to Naira depreciation, as well as the non-settlement of the $2.4 billion worth of Forex forward contract by the Central Bank of Nigeria (CBN)
Continuing, the MAN boss also stated that manufacturers’ spending on alternative energy sources, such as diesel, other fuels, and generators, also rose sharply in 2024, with total expenditure put at N1.11 trillion, representing a 42.3% increase from N781.68 billion, in 2023
Ajayi revealed that, in over four decades, the sector’s capacity utilization plummeted from 73.3%, in 1981, to 57% in 2024, while its contribution to the nation’s economy also shrank from 29.9% to 8.6% over the same period.
The sector’s Real growth, he added, also witnessed a deceleration from 14.7% in 2014 to 1.38% in 2024, while non-oil export contributions have nose-dived from 82.37% in 2019 to 25.13% in 2024.
The MAN boss lamented that, despite being the engine of industrialization, Nigeria’s manufacturing has been lacklustre due to different constraints, that have continued to inhibit it from playing such crucial role.
Some of the challenges facing the sector, he stated, include: unstable exchange rate, inadequate power supply/high energy costs, high inflation, insecurity, multiplicity of regulatory agencies and high regulation costs, among others.
“The sector is worse hit by the prevailing economic downturn. It is now facing the combined storm of Forex losses, rising raw material costs, high energy prices, multiple taxation, escalated borrowing costs, infrastructural deficits and policy uncertainties.
“Market access and integration remain limited due to inadequate trading information and infrastructure deficits. The poor transport system has escalated logistics costs, making Nigerian manufacturers less competitive.
“Insecurity has elevated business risks, increased costs and made the investment environment uncertain. Agro-allied industrial activities have remained challenged by insurgent activities and farmer-herder clashes,” he stated.
The MAN boss, therefore, believed that for the sector to really serve as a catalyst for the nation’s economic growth, it has become imperative for government to address those challenges, and unlock the growth potential of the sector.
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He, therefore, called on the media to leverage its influence to promote the manufacturing sector, and work with MAN to champion the reforms necessary for the sector’s survival and sustainable growth.
“The media should serve as a powerful tool to project MAN’s policy priorities and ensure manufacturers’ concerns are put in the forefront of public and government discourse,” he stated.
