Nigeria’s Industrialisation at Risk as Manufacturing, Agriculture Sectors Decline Despite GDP Rebasing
Nigeria’s path to industrialisation faces growing threats as manufacturing and agriculture sectors continue to weaken, widening the gap with the services sector. Industry stakeholders warn that this imbalance reflects deep-rooted structural defects that could derail the country’s long-term economic growth. The real sector—considered the backbone of industrialisation—has now experienced six consecutive years of decline, according to official data.
Data from the National Bureau of Statistics (NBS) shows that manufacturing contributed an average of just 8.8% to Nigeria’s GDP between 2020 and 2024, while agriculture averaged 25.5%. In contrast, the services sector surged ahead, accounting for 54.9% during the same period. Manufacturing contribution slid from 8.99% in 2020 to 8.41% in 2024, while agriculture dropped from 26.21% to 24.64%. Services expanded from 52.44% in 2020 to 56.89% by 2024, further consolidating dominance.
Although GDP rebasing in Q1 2025 temporarily lifted manufacturing’s share to 9.62%, experts argue this reflects statistical adjustments rather than real growth. The services sector jumped even higher to 57.5%, while agriculture fell to 23.33%. Economists caution that a strong manufacturing base should precede a service-led economy, warning that Nigeria is skipping essential growth stages. “Manufacturing should contribute at least 40% to GDP for sustainable industrialisation,” said Prof. Akpan Ekpo.
A recent report by Quartus Economics revealed that Nigeria’s manufacturing sector lost N1.2 trillion between 2019 and 2023, shrinking by 21% as over half of industrial categories declined. Agriculture grew by only 11% and services by 3% during the same period, both lagging behind population growth. Analysts note that such weak performance signals de-industrialisation rather than structural transformation.
Foreign Direct Investment (FDI) trends further underscore the sector’s struggles. According to Proshare, manufacturing attracted just $129.2 million in FDI in Q1 2025, down from $421 million the previous quarter and marking the lowest inflow since mid-2022. Experts say reversing the decline will require bold policy reforms, macroeconomic stability, and targeted incentives to attract capital and revive Nigeria’s real sector, which remains critical for achieving sustainable economic growth.
Source: Vanguard