Manufacturing slump could stall Nigeria’s economic gains — CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s weak manufacturing sector poses a serious risk to sustainable economic growth, despite modest gains recorded in early 2026.

The Chief Executive Officer of CPPE, Muda Yusuf, raised the concern in a policy brief analysing the Q1 2026 Gross Domestic Product (GDP) report released by the National Bureau of Statistics (NBS).

According to the report, Nigeria’s real GDP grew by 3.89 per cent year-on-year in the first quarter of 2026, an improvement from 3.13 per cent recorded in the same period of 2025.

While Yusuf acknowledged signs of improving macroeconomic stability, driven largely by trade and services, he cautioned that the weak performance of the manufacturing sector and a significant contraction in electricity supply remain key structural challenges.

He noted that manufacturing grew by 3.29 per cent in Q1 2026, up from 1.13 per cent in the previous quarter, with contributions from petroleum refining, food and beverages, cement, chemicals, and pharmaceuticals. However, he stressed that the sector still contributes less than 10 per cent to GDP.

Yusuf attributed the sector’s underperformance to high energy costs, rising interest rates, poor infrastructure, logistics constraints, and policy uncertainties, all of which continue to undermine industrial productivity and competitiveness.

“The economy cannot achieve lasting structural transformation without a strong manufacturing base. Industrialisation remains critical for job creation, export growth, and inclusive development,” he said.

He also highlighted the continued decline of the textile industry as a sign of deepening de-industrialisation, warning that the collapse of labour-intensive sectors has serious implications for employment, income levels, and poverty reduction.

Yusuf further pointed to a structural imbalance in the economy, noting that although the non-oil sector accounts for about 96 per cent of GDP, it generates less than 15 per cent of foreign exchange earnings due to weak export capacity and limited integration into global value chains.