Nigeria’s manufacturing sector is at a crossroads, and industry leaders are warning that the country cannot afford to delay the shift from import dependence to domestic production. At a national workshop on the implementation of the Local Vendor policy in the manufacturing sector, the Manufacturers Association of Nigeria (MAN) called on the Federal Government to take urgent, coordinated action to strengthen local manufacturing and reduce the economy’s exposure to external shocks.
A Warning Against Import Dependence
The Director-General of MAN, Mr Segun Ajayi, delivered the association’s position at the workshop, which was organised by the National Office for Technology Acquisition and Promotion (NOTAP) on Wednesday in Lagos. Represented by Mrs Oluyinka Omojolaibi, Assistant Director of the Research and Economic Policy Division, Ajayi cautioned that Nigeria’s heavy reliance on imported machinery, industrial inputs, technologies and finished products poses both economic and national security risks.
According to the MAN Director-General, this dependence exposes the economy to foreign exchange pressures, global supply chain disruptions, inflation and external economic shocks. He noted that although Nigeria possesses abundant natural resources, a large consumer market and an entrepreneurial population, these advantages have yet to translate into commensurate manufacturing competitiveness.
Nigeria’s Manufacturing Performance in Comparative Perspective
Presenting an address titled “Import-Dependent Competitive Nigeria Capability,” Ajayi acknowledged that Nigeria holds the continent’s largest manufacturing employment figure, estimated at 12.76 million jobs. However, he stressed that the country’s manufacturing output and productivity remain significantly below those of several African peers.
Citing comparative 2025 figures, the MAN Director-General revealed that Nigeria’s manufacturing value added stood at $24.01 billion, representing 8.26 per cent of Gross Domestic Product (GDP). By contrast, Egypt recorded $52.96 billion and South Africa $52.35 billion. Nigeria’s manufacturing capacity utilisation was put at 59.5 per cent, trailing Morocco at 81 per cent, South Africa at 76 per cent and Egypt at 70.5 per cent. The gap is even starker in per capita terms: Nigeria’s manufacturing value added per capita is $101.09, compared with $808.52 in South Africa, $708.60 in Morocco and $347.41 in Egypt.
Energy Costs and Structural Constraints
The association identified a combination of challenges compounding Nigeria’s manufacturing difficulties, including unreliable electricity, high interest rates, multiple taxation, regulatory bottlenecks, expensive imported inputs and rising transportation costs. Ajayi disclosed that manufacturers spent more than N1.34 trillion on alternative power generation in 2025 alone, with energy expenses accounting for over 50 per cent of their operating overheads.
These persistent constraints, he explained, have limited factory operations, reduced capacity utilisation and weakened the ability of local manufacturers to compete with foreign producers. The implication is clear: without addressing these structural issues, Nigeria’s industrial ambitions will remain out of reach.
A Coordinated Strategy for Industrial Transformation
Ajayi emphasised that establishing more factories alone will not guarantee industrial self-sufficiency. Instead, he called for a coordinated strategy involving government, financial institutions, educational institutions, research organisations and the private sector. Among the critical steps he identified were strengthening local manufacturing, improving access to affordable finance, investing in technical education, promoting research and innovation, upgrading infrastructure and energy supply, and encouraging technology transfer.
The MAN Director-General also advocated stronger support for small and medium-sized enterprises, particularly through access to funding, modern equipment, technical expertise and markets. On foreign investment, he urged that investors be encouraged to build partnerships with Nigerian businesses, universities and research institutions, stressing that technology transfer must extend beyond the importation of equipment to include practical training, technical collaboration and the development of local suppliers.
Standards, Quality and Export Development
Also speaking at the workshop, Jonas Nzeagwu, Director of Technology Transfer Registration at NOTAP, argued that strengthening local production requires improved standards, certification, metrology, quality management and stricter enforcement. These measures, he explained, would guard against counterfeit products and ensure that Nigerian-made goods can compete favourably in both local and international markets. He also called for support for domestic manufacturers to meet the standards required under the African Continental Free Trade Area and other international trade arrangements.
Nzeagwu identified export development as another critical component of industrial transformation, urging Nigeria to expand its export base beyond crude oil to include agricultural products, manufactured goods, pharmaceuticals, digital services and engineering solutions.
Roles for Government, the Private Sector and Citizens
According to Nzeagwu, achieving competitive domestic production requires coordinated contributions from all levels of government, private businesses, financial institutions, educational and research institutions, and citizens. He said the Federal Government must ensure the effective implementation of the recently launched Nigerian Industrial Policy, provide an enabling business environment, invest in critical infrastructure and improve access to industrial financing. He further urged the government to strengthen institutions responsible for standards and quality control.
State governments, he added, should identify their respective comparative advantages and develop industrial programmes around them. States with strong agricultural potential should prioritise agro-processing, while mineral-rich states should promote mineral processing and manufacturing. States with established commercial centres should develop industrial and logistics hubs, and those with technology ecosystems should support innovation and digital industries.
Nzeagwu also urged the private sector to increase investment in modern equipment, workforce development, research, innovation, quality improvement and efficient production processes. Financial institutions, particularly banks and development finance institutions, should prioritise financing for productive investments rather than concentrating predominantly on short-term commercial activities. Universities, polytechnics and technical colleges, he said, should align their academic programmes with the practical skills and technological needs of Nigerian industries.
Citizens, too, have a role to play. Nzeagwu called on Nigerians to contribute to industrial development by patronising quality locally manufactured products, acquiring technical and vocational skills, promoting entrepreneurship, supporting local innovators and showcasing Nigerian products internationally.
Beyond Policy Announcements
The NOTAP director identified targeted industrial financing, improved electricity supply and industrial infrastructure, stronger technical and vocational education, and the commercialisation of research findings as essential measures for achieving the country’s industrial ambitions. He also emphasised effective implementation of local content policies, expansion of non-oil exports and policy consistency as critical to driving sustainable industrial development.
However, Nzeagwu cautioned that the transition from import dependence to competitive domestic production requires more than policy announcements. It demands sustained implementation, institutional accountability and a change in national attitude towards production. Nigeria, he maintained, must move beyond being a major consumer of foreign products to developing the capacity to manufacture what it needs, improve the quality of its products and export goods and services demanded by the global market.
The message from both MAN and NOTAP is unambiguous: Nigeria’s industrial future depends on deliberate, coordinated action to build a competitive domestic manufacturing base, and the time to act is now.
