Nigeria’s ambition to change into a globally aggressive manufacturing and export-driven financial system continues to face main headwinds as persistent structural boundaries threaten latest positive aspects.
Regardless of marginal development within the manufacturing sector’s GDP contribution within the first quarter (Q1) of 2025 largely attributed to international alternate reforms, trade leaders and commerce consultants warn that deep-rooted challenges together with poor infrastructure, restricted entry to long-term financing, weak regulatory coordination, and lack of market intelligence proceed to undermine development.
They referred to as for pressing, focused reforms to revive investor confidence, scale native industries, and reposition Nigerian exports on the worldwide stage, noting that these challenges are stalling export development and limiting Nigeria’s capability to combine into world worth chains.
Knowledge from the Nationwide Bureau of Statistics (NBS) reveals that the manufacturing sector contributed 9.62 % to Nigeria’s Gross Home Product (GDP) in Q1 2025, an enchancment from 7.62 % in This autumn 2024.
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Nevertheless, this determine was decrease than the 9.76 % recorded in the identical interval final 12 months, underscoring the delicate nature of the restoration.
Regardless of FX reduction, logistical bottlenecks, lack of commerce intelligence, poor documentation practices, and inadequate transport infrastructure are nonetheless limiting elements.
Ashish Khamka, chief monetary officer at Lagos Free Zone (Tolaram Group), emphasised the necessity for higher coordination amongst regulatory companies. “We regularly have a number of companies conducting inspections independently. A joint inspection board may streamline oversight and cut back inefficiencies,” he stated.
He added that such collaborative fashions have pushed export success in markets like India and Ghana.
Peter Olowononi, director of Consumer Relations for Anglophone West Africa on the African Export-Import Financial institution (Afreximbank), careworn that whereas Nigerian producers are ramping up manufacturing capability, the absence of crucial infrastructure continues to stifle export prospects.
“Buyers are already dedicated by way of productive capability. However transferring items from manufacturing facility gates to ports or ultimate consumers stays a significant problem, whether or not by street, rail, sea, or air. It’s not simply arduous infrastructure. Even smooth infrastructure, like product testing and high quality assurance, is lacking in lots of areas,” Olowononi stated
He famous that this hole prompted Afreximbank to determine the African High quality Assurance Centre (AQAC), a facility designed to assist exporters meet worldwide requirements. “We’ve seen circumstances the place merchandise had been rejected overseas for not assembly entry necessities. Exporters nonetheless aren’t absolutely conscious of AQAC and comparable platforms,” he added.
Highlighting logistics constraints, Olowononi cited the case of a Chinese language order that took 78 days to succeed in Cameroon as a result of trans-shipment delays. “We have to construct capability to mixture cargo volumes and facilitate direct delivery routes. The identical goes for air cargo. Our home airways lack the capability to assist branded exports.”
He proposed a collaborative financing mannequin involving business banks and a nationwide reserve fund to handle these infrastructure gaps, which, in response to him, is important for transferring each items and companies from manufacturing to world markets.
In Could, Segun Ajayi-Kadir, director-general, Producers Affiliation of Nigeria (MAN), described the sector’s efficiency as ‘sub-optimal,’ attributing it to a litany of persistent constraints.
These embrace: unstable alternate charges, insufficient energy provide, excessive power and logistics prices, excessive inflation, insecurity, a number of regulatory companies and overlapping costs, excessive rates of interest, and poor entry to credit score. He additionally pointed to poor infrastructure, unfavourable commerce insurance policies and low native patronage as main hindrances.
Sheriff Balogun, president of the Nigerian-American Chamber of Commerce, emphasised the pressing want for commerce intelligence techniques powered by synthetic intelligence (AI) to determine viable export markets and information product improvement.
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“Earlier than processing a product for export, companies should perceive the place the demand lies. AI-powered commerce intelligence instruments can assist match merchandise with viable markets.
“Market entry is not only about figuring out normal info; it’s about harvesting information to derive actionable insights for particular merchandise. The Ministry of Commerce should lead in establishing a nationwide commerce intelligence facility,” Balogun stated
He recounted a latest case the place a processor of sesame seed oil was unable to promote his merchandise as a result of lack of market analysis.
“We advocate ‘course of’ as an alternative of ‘export uncooked.’ however you could first determine the place the demand is, what the market wants, after which assist producers accordingly,”
Balogun additionally warned in opposition to insurance policies that penalise exporters engaged in worth addition. “We ought to be incentivising, not punishing them. Processing can yield extra returns than uncooked exports, however provided that it’s guided by real-time market intelligence and supportive laws.”
Louise Odom, government director, Zenith Financial institution, pointed to flaws in export documentation and fee techniques. “Many exporters keep away from letters of credit score, leaving them financially uncovered. Correct documentation and safe fee mechanisms are important to construct credibility and guarantee returns,” he stated.
