Nigeria’s industrial sector remains under intense pressure from surging production costs, multiple taxation, and foreign exchange volatility, despite manufacturers’ efforts to stay afloat through innovation and local sourcing, the Chemical and Non-Metallic Products Employers Federation (CANMPEF) has warned.
Presenting his report at the Federation’s 46th Annual General Meeting (AGM) in Lagos, the President of CANMPEF, Chief Devakumar Edwin, said the manufacturing sector managed to record modest growth in 2024, supported by local resource utilisation, product diversification, and expanding regional export opportunities.
He noted that while Nigerian manufacturers demonstrated resilience amid economic headwinds, the sustainability of that progress remains uncertain unless urgent policy interventions are made to address structural bottlenecks.
“The business environment remained constrained by high input costs, multiple taxation, and limited access to foreign exchange,” Edwin said. “Despite these headwinds, CANMPEF members showed remarkable adaptability — optimising resource use, innovating around local material sourcing, and exploring regional markets.”
Industrial Performance and Economic Context
Edwin observed that the removal of fuel subsidy and the floating of the Naira, while intended to stabilise the macroeconomic landscape, have had mixed consequences for the industrial sector — significantly escalating energy and import costs and squeezing manufacturers’ margins.
According to the Central Bank of Nigeria’s (CBN) Q4 2024 Economic Report, the manufacturing sub-sector grew modestly by 1.79% year-on-year, buoyed by product diversification and increased local sourcing. Average capacity utilisation rose to 61.9%, showing moderate recovery in output levels.
The Federation’s report also cited broader economic data reflecting cautious optimism. Nigeria’s GDP expanded by 3.84% in the fourth quarter of 2024 to reach ₦22.61 trillion, driven primarily by the non-oil sector, particularly financial and insurance services.
However, inflationary pressures and currency depreciation continued to weigh on competitiveness. The exchange rate, which averaged ₦1,623.26 per dollar, represented a 2.13% depreciation, while headline inflation surged to 34.8%, largely due to high energy costs and exchange rate volatility.
Outlook for 2025: Pushing a New Industrial Agenda
Looking ahead, Edwin said CANMPEF’s 2025 industrial agenda will centre on advocacy for infrastructure renewal, local value chain strengthening, and regulatory engagement to ensure long-term growth and job creation.
He emphasised that collaboration between the private sector and government will be key to sustaining industrial output and positioning Nigeria as a competitive manufacturing hub in West Africa.
“Our focus in 2025 is to drive a pragmatic industrial agenda that aligns policy, infrastructure, and investment incentives with manufacturers’ realities,” Edwin stated. “We must build a more predictable regulatory environment to support innovation, exports, and inclusive growth.”
Despite daunting macroeconomic headwinds, CANMPEF said Nigeria’s manufacturers have shown resilience and adaptability — a sign that with the right mix of policies, infrastructure investment, and foreign exchange stability, the sector can remain a strong pillar of national growth.