Lagos, Ogun dominate as food, beverage firms attract N375bn investment

Nigeria’s food, beverage and tobacco sector attracted N375.03bn in fresh investments in 2025, emerging as the largest recipient of manufacturing capital during the year.

The figure represents a 63.5 per cent increase from the N229.42bn invested in the sector in 2024, according to data from the Manufacturers Association of Nigeria.

The investment was driven by continued expansion among manufacturers seeking to take advantage of Nigeria’s large consumer market.

Major companies including Flour Mills of Nigeria, BUA Foods, Nestlé Nigeria, Dangote Sugar, Dufil, Cadbury Nigeria, CHI Limited, Unilever Nigeria and Honeywell Flour Mills were among those that invested in the sector.

The non-metallic products industry ranked second with N280.12bn, largely supported by investments in cement and glass manufacturing.

Motor vehicle assembly attracted N170.8bn, while the chemical and pharmaceutical sector received N123.61bn.

Industrial plastics, rubber and foam manufacturers recorded N123.44bn in investments, while the textile and carpet industry attracted N112.53bn.

Overall, manufacturing investment reached N1.33tn in 2025.

However, investment remained heavily concentrated in Lagos and Ogun, which together attracted N1.74tn in industrial investments in 2024 and 2025, representing 87.32 per cent of the total recorded nationwide during the period.

The other 34 states accounted for N252.23bn, or about 12.7 per cent.

The figures highlight the continued dominance of the Lagos-Ogun industrial corridor, which benefits from access to major markets, ports, infrastructure and established business networks.

Lagos’ proximity to the Apapa, Tin Can Island and Lekki ports gives manufacturers easier access to imported raw materials and export markets. The state also offers a large consumer base and a well-developed financial and commercial ecosystem.

Ogun, which shares a boundary with Lagos, has also emerged as a major manufacturing hub, with industrial clusters in Agbara, Igbesa, Ota and Sango-Ota.

The availability of land and relatively lower costs of establishing and expanding factories compared with Lagos have helped the state attract manufacturers.

MAN data showed that manufacturers invested N3.35tn across Nigeria between 2014 and 2020.

Ogun accounted for N1.68tn, representing 50.16 per cent of the total, while Lagos attracted N928bn, or 27.7 per cent.

However, manufacturers operating outside the Lagos-Ogun corridor continue to face challenges, including poor road networks, limited access to ports, high logistics costs and insecurity.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the Lagos-Ogun axis had an advantage because of its large market and proximity to seaports.

Yusuf said the cost of transporting raw materials to factories and finished products to markets remained a major consideration for manufacturers when choosing where to locate their businesses.

A consultant economist and former Central Bank of Nigeria analyst, Nonso Ihuoma, similarly attributed Lagos’ manufacturing advantage to its strategic location and access to functional seaports.

He said developing ports in other parts of the country could reduce transportation costs and encourage manufacturers to establish factories outside Lagos and Ogun.

Experts also identified insecurity in some parts of the country as another factor discouraging businesses from expanding into other regions.

They called for improved port, road and rail infrastructure, alongside stronger investment incentives, to encourage a wider distribution of manufacturing investments across Nigeria.