In the first half of 2024, Nigeria’s manufacturing sector recorded a 30% increase in investments, reaching N250.13 billion, with significant contributions from industry giants such as Dangote Group, BUA Group, and Flour Mills of Nigeria. The Manufacturers Association of Nigeria (MAN) attributes this rise largely to the depreciating naira, which has inflated costs for imported machinery and assets rather than reflecting real growth. Despite the increase, most investments were geared toward sustaining production rather than expansion due to the challenging economic environment.
In 2023, the sector also saw a 32% increase in investment, with N427.18 billion funneled into plants, machinery, and fixed assets. Major players, including Nestle, Emzor, and BUA Cement, made substantial investments, such as BUA’s $500 million loan from the International Finance Corporation for plant expansion and Emzor’s €13.85 million secured from the European Investment Bank for a malaria drug production facility. However, inflation and exchange rate volatility diminished the real value of these investments, affecting sectoral growth across the last decade.
Nigeria’s manufacturers continue to face steep challenges, including high energy costs, foreign exchange scarcity, and policy instability. With the naira weakening over 70% since mid-2023, importation costs for raw materials have spiked, and local manufacturers struggle under high fuel prices and an increased interest rate of 27.25%. These factors, combined with insecurity and logistics costs, have raised concerns about the manufacturing sector’s sustainability and impact on product prices amid decreasing consumer purchasing power.
