• Jumoke Oduwole, Minister of Industry, Trade and Investment
THE recent UN ranking, which places Nigeria eighth in Africa and 98th globally on the Industrialisation Index, underscores the country’s underperformance in industrial competitiveness despite its vast population, abundant natural resources, and significant oil wealth.
This should serve as a wake-up call for policymakers and stakeholders to take concerted and urgent action to reverse the trend.
At a high-level Nigerian Economic Summit Group dialogue a week ago in Abuja, economist Kelvin Emmanuel rightly noted: “Nigeria’s manufacturing value per person is just $216, compared to $645 in South Africa and $524 in Egypt.”This disparity highlights the urgent need to confront the challenges undermining Nigeria’s industrialisation prospects and to design and implement policies that can set the country on a path of sustainable industrial growth.
Nigeria’s manufacturing sector has declined, contributing only 9.62 per cent to GDP in the first quarter of 2025, compared with the rapidly expanding ICT sector, which accounted for about 17 per cent in the same period.
The sector has averaged a sluggish growth rate of just 1.29 per cent over the past five quarters, hampered by structural and macroeconomic headwinds.
FDI inflows into manufacturing also plummeted sharply, dropping to $129.2 million in Q1 2025 from $421.0 million in the previous quarter.
Industrialisation remains critical to economic development, driving productivity and efficiency through mass production, creating jobs, and raising living standards.
It fosters innovation, attracts foreign investment, diversifies the economy to improve resilience, and can generate higher government revenue and national income.Nigeria cannot transition to a knowledge economy without a solid industrial base.
Therefore, it must urgently rebuild and expand the linkages between the agricultural and industrial sectors to strengthen the value chain while also focusing on foundational industries such as oil and gas, steel, and mining, which form the backbone of industrial activity.
To achieve this, the country must address its infrastructure deficits, particularly the erratic power supply that forces reliance on costly alternative sources, choking profitability and stifling growth.
Decaying transport networks escalate input costs and limit market access. States need to leverage legislative reforms to tackle the energy crisis by investing in power generation and transmission, and fixing roads within their boundaries.
“The Manufacturers Association of Nigeria insists: “Without transparent, consistent policies and a secure environment, manufacturers cannot plan for the long term or compete effectively.”
Proper implementation of the Petroleum Industry Act, aligned with Africa’s Agenda 2063, can redirect oil revenues and operations towards local refining, petrochemical industries and broader value-added sectors such as plastics, fertilisers, pharmaceuticals, synthetic fabrics, and solvents.
Beyond infrastructure, financial exclusion continues to cripple industrial expansion. SMEs, critical to broad-based industrial growth, face significant hurdles in accessing affordable credit.
High-interest rates, sometimes up to 35 per cent, combined with a devalued naira, inflate the cost of machinery and raw materials, limiting investments in technology and capacity expansion.
Therefore, Nigeria needs to support SMEs in facilitating access to credit and creating backward and forward linkages to boost local content, while encouraging decentralisation of industries beyond urban centres to stimulate inclusive growth, especially job opportunities.
The government should intensify efforts to create a transparent, investor-friendly business environment.
The Manufacturers Association of Nigeria insists: “Without transparent, consistent policies and a secure environment, manufacturers cannot plan for the long term or compete effectively.”
So, no amount of presidential globetrotting will attract committed investors without streamlined regulations, policy consistency, and a concerted fight against corruption and insecurity.
To reverse Nigeria’s disappointing industrialisation ranking, the government should prioritise reliable power supply and a modern transport system, including interlinking railways, roads, and inland waterways, to reduce industrial costs.
China and India accelerated their industrial sector growth by establishing industrial parks with ready access to water, electricity, and logistics, enabling cluster development and economies of scale.
The government must ramp up current efforts in creating industrial clusters.
Reinstating export incentives such as the Export Expansion Grant could boost Nigeria’s global competitiveness…”