Nigeria leaves over N40trn manufacturing market to imports-Report

Nigeria is leaving more than ₦40 trillion worth of manufacturing opportunities to foreign producers as imports supplied 64 per cent of domestic demand for manufactured goods in 2025, exposing the scale of the country’s industrial deficit and the jobs, investment and foreign exchange that could be retained through stronger local production.

The finding is contained in the Nigerian Manufacturing Opportunity Report 2026, launched by SEID at the 54th Annual General Meeting of the Manufacturers Association of Nigeria in Lagos.

According to the report, the import-dependent share of domestic manufactured-goods demand represented a market of about $29.4 billion that Nigerian manufacturers failed to capture in 2025.

The figure presents one of the clearest measures of the gap between Nigeria’s huge consumer market and the capacity of its factories to meet that demand.

Rather than a shortage of customers, the report identifies a supply and competitiveness problem, with domestic producers constrained by high energy costs, inadequate infrastructure, logistics bottlenecks, limited technical capacity and other structural weaknesses.

The opportunity is particularly significant because manufactured goods account for about 53 per cent of Nigeria’s import bill, meaning a substantial proportion of the country’s foreign exchange continues to finance production and value addition outside the economy.

Managing Partner of SEID, Tubosun Akeju, said Nigeria already had the demand and industrial strengths required to build a stronger manufacturing sector, but needed to identify where those strengths existed and deepen them through investment and improved competitiveness.

The report maps five major areas of opportunity: light manufacturing and packaging; food and agro-processing; textiles, apparel and leather; chemicals and pharmaceuticals; and cement and steel.

It also argues against a one-size-fits-all approach to industrial policy, pointing to substantial differences in manufacturing capacity and specialisation across states, regions, value chains and industrial clusters.

The South-West remains the country’s largest manufacturing zone, while other regions have developed strengths in sectors ranging from agro-processing and textiles to chemicals, pharmaceuticals, cement and steel.

But the report warns that Nigeria’s industrial expansion remains too narrow. Manufacturing output grew only 1.4 per cent in 2025 before improving to 3.3 per cent in the first half of 2026, from 1.6 per cent a year earlier, while nearly 90 per cent of the latest growth came from cement and food processing.

Manufacturing’s contribution to gross domestic product also fell to 8.05 per cent in 2025 from 8.42 per cent in 2023, leaving the sector well below the 15 per cent target under Nigeria’s Industrial Policy 2030.

The export side presents another weakness. Nigeria’s manufacturing export intensity stood at 3.53 per cent in 2024, compared with 19.29 per cent for sub-Saharan Africa, showing that local manufacturers remain disproportionately focused on the domestic market.

SEID said the answer is not simply to produce more, but to improve the competitiveness of Nigerian products through stronger energy supply, logistics, infrastructure, skills and deeper value chains.

The report identified light manufacturing and packaging as one of the largest gaps, with imports supplying about 80 per cent of a $15.9 billion market.

For investors, the findings identify areas where production can be expanded. For manufacturers, they show where market share can be won from imports. For government, they provide a measure of the economic value at stake if the conditions required for local production are improved.

The launch therefore comes with a difficult message for Nigeria’s industrial policy: the country already has the consumers and market demand, but foreign manufacturers are capturing a large share of the opportunity.

Closing that gap would reduce import dependence, conserve foreign exchange, create industrial jobs and increase the amount of value generated within Nigeria.

The central economic challenge is consequently no longer whether Nigeria has a manufacturing market. It is whether its factories can become competitive enough to capture it.