Market News

Nigeria’s manufacturing sector lost an estimated $29.4 billion opportunity to imports in 2025 as local producers struggled to meet a large share of domestic demand, a new report by SEID has revealed.

“The Nigerian Manufacturing Opportunity Report 2026,” launched by SEID at the 54th Annual General Meeting of the Manufacturers Association of Nigeria (MAN), said imported products accounted for 64 per cent of the market for manufactured goods.

The report examined five major subsectors: Light Manufacturing and Packaging; Food and Agro-processing; Textiles, Apparel and Leather; Chemicals and Pharmaceuticals; and Cement and Steel.

The report attributed the trend largely to weak local value chains, which have left manufacturers dependent on imported machinery, components, raw materials and other industrial inputs.

 It said manufactured goods represented about 53 per cent of Nigeria’s total import bill, despite efforts to expand domestic production.

 According to the report, manufacturing output grew by 1.4 per cent in 2025, before improving to 3.3 per cent in the first half of 2026, compared with 1.6 per cent in the corresponding period of 2025.

 However, the growth was largely concentrated in cement and food processing, which accounted for almost 90 per cent of the 3.3 per cent expansion recorded during the period.

The report said the concentration raised concerns about the breadth of the country’s industrial recovery, noting that manufacturing’s contribution to Gross Domestic Product (GDP) declined from 8.42 per cent in 2023 to 8.05 per cent in 2025.

This, it said, remained about seven percentage points below the 15 per cent target under the Nigeria Industrial Policy for 2030.

In the light manufacturing and packaging subsector, the report estimated the market at $15.9 billion but said domestic manufacturers supplied only 20 per cent of demand.

It noted that local producers continued to rely on imported resins, tooling, components and equipment, even when final assembly was carried out locally.

Chemicals and pharmaceuticals were identified as the most import-dependent subsector, with imports valued at $4.25 billion amid strong domestic demand.

The textile, apparel and leather industry also recorded a widening gap between local production and imports.

The report said domestic production grew by 5.8 per cent between 2024 and 2025, while imports rose by 53.8 per cent, increasing import penetration from 10.5 per cent to 14.6 per cent.

Food and agro-processing, however, was identified as one of the areas with significant potential, with a market estimated at $10.93 billion and the country’s strongest manufacturing export base.

The sector continues to face difficulties in securing adequate agricultural inputs due to fragmented value chains and post-harvest losses estimated at between N3.5 trillion and N5 trillion annually.

Managing Partner of SEID, Tubosun Akeju, said Nigeria already possessed the demand and industrial strengths required to develop a stronger manufacturing base.

Akeju said the priority should be to identify existing areas of strength, deepen local production and improve competitiveness.

He said the report was designed to provide policymakers and industry players with information on immediate manufacturing opportunities, areas where the country was making progress and measures required to increase local value addition.

The report identified stronger domestic value chains as critical to reducing Nigeria’s dependence on imported inputs.

It said developing local supply chains would allow manufacturers to source more materials domestically, create jobs, reduce import dependence and improve the competitiveness of Nigerian products in domestic and international markets.