The Nigerian manufacturing sector demonstrated resilience in 2024 despite facing significant challenges, including macroeconomic instability, inflationary pressures, and policy-driven disruptions, according to the Manufacturers Association of Nigeria (MAN) Economic Review for the second half of 2024.
Capacity utilization in Nigeria’s manufacturing sector improved marginally to 57.0 percent in 2024, up from 55.1 percent in 2023. A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.
However, persistent challenges such as rising energy costs, forex volatility, and high interest rates constrained further growth.
The sector’s real manufacturing output increased modestly by 1.7 percent year-on-year to N7.78 trillion, buoyed by increased activity in Motor Vehicle & Miscellaneous Assembly, Non-Metallic Mineral Products, and Electrical & Electronics.
However, a half-on-half decline of 3.1 percent in real production reflected rising costs and weak consumer demand.
The manufacturing sector’s local raw material sourcing increased to 57.1 percent in 2024, up from 52.0 percent in 2023. This shift was largely driven by forex scarcity, high import costs, and government incentives promoting local content.
Despite the improvements, the sector faced significant challenges, including high inflation, forex volatility, surging production costs, and declining consumer demand.
The report highlighted the need for stabilizing macroeconomic conditions, improving energy supply, and ensuring access to affordable financing to sustain growth and enhance industrial productivity.
The Nigerian manufacturing sector showed resilience in 2024, but the challenges ahead require urgent attention.
According to Segun Ajayi-Kadir, Director General of MAN, “stabilizing macroeconomic conditions, improving energy supply, and ensuring access to affordable financing will be critical for sustaining growth and enhancing industrial productivity.”
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