Nigeria’s food, beverage and tobacco industry emerged as the largest destination for manufacturing investment in 2025, attracting N375.03bn in fresh capital, according to data from the Manufacturers Association of Nigeria (MAN).
The figure represents a 63.5 per cent increase from the N229.42bn invested in the sector in 2024, reflecting continued expansion by manufacturers seeking to meet demand in one of Africa’s largest consumer markets.
The sector’s performance placed it ahead of other major manufacturing segments despite the challenging operating environment faced by businesses, including high production costs, infrastructure constraints and logistics challenges.
Major companies that invested in the industry during the year included Flour Mills of Nigeria, BUA Foods, Nestlé Nigeria, Dangote Sugar, Dufil, Cadbury Nigeria, CHI Limited, Unilever Nigeria and Honeywell Flour Mills.
The non-metallic products sector ranked second, attracting N280.12bn, with investments driven largely by cement and glass manufacturing.
Motor vehicle assembly followed with N170.8bn, while the chemical and pharmaceutical industry attracted N123.61bn.
Manufacturers in the industrial plastics, rubber and foam segment invested N123.44bn, while the textile and carpet industry received N112.53bn.
Across the manufacturing sector, total investment stood at N1.33tn in 2025, underscoring the scale of capital deployed despite persistent concerns over the business environment.
While the food, beverage and tobacco industry led investment by sector, Lagos and Ogun continued to dominate as destinations for manufacturing capital.
The two states attracted N1.74tn in industrial investment between 2024 and 2025, accounting for 87.32 per cent of total investment recorded nationwide during the period.
The remaining 34 states collectively attracted N252.23bn, representing approximately 12.7 per cent of the total.
The concentration of investment highlights the continuing importance of the Lagos-Ogun industrial corridor to Nigeria’s manufacturing economy.
Lagos has retained its appeal to manufacturers because of its large consumer market, established commercial ecosystem and access to major maritime gateways.
The Apapa, Tin Can Island and Lekki ports provide manufacturers with access to imported raw materials and export markets, while the state’s financial, commercial and logistics networks offer additional advantages for businesses.
Ogun, meanwhile, has benefited significantly from its proximity to Lagos.
Industrial locations including Agbara, Igbesa, Ota and Sango-Ota have developed into major manufacturing clusters, attracting companies seeking access to Lagos markets without bearing the full cost of operating within the state.
The availability of industrial land and comparatively lower expansion costs have also contributed to Ogun’s emergence as a major manufacturing destination.
Historical investment figures from MAN further illustrate the changing distribution of manufacturing capital between the two states.
Between 2014 and 2020, manufacturers invested N3.35tn across Nigeria. Ogun accounted for N1.68tn, representing 50.16 per cent of the total, while Lagos attracted N928bn, equivalent to 27.7 per cent.
The concentration of manufacturing investment in the Lagos-Ogun corridor has also raised concerns about the uneven distribution of industrial activity across the country.
Manufacturers operating in other regions face challenges associated with transportation and logistics, including inadequate road networks, limited access to ports and other infrastructure constraints.
These challenges can increase the cost of moving raw materials to factories and transporting finished products to major markets.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the Lagos-Ogun axis benefits from a combination of market access and proximity to ports.
He noted that location decisions were heavily influenced by the cost of bringing raw materials into production facilities and distributing finished products to consumers.
A consultant economist and former Central Bank of Nigeria analyst, Nonso Ihuoma, similarly attributed Lagos’ advantage partly to its geographical position and access to functioning seaports.
He argued that developing ports in other parts of the country could reduce transportation costs and encourage manufacturers to establish factories outside the Lagos-Ogun corridor.
Security concerns in some parts of the country also remain an additional consideration for businesses evaluating potential investment locations.
Manufacturers seeking to establish plants outside the established industrial corridor may have to factor in security-related risks and additional operating costs, further reinforcing the concentration of investment in areas with established industrial infrastructure.
Industry experts have consequently called for greater investment in transport and industrial infrastructure across the country, particularly the development of additional ports, better road networks and rail connections.
They also emphasised the need for investment incentives capable of encouraging manufacturers to establish production facilities in underserved regions.
A broader geographical spread of manufacturing investment, they argue, could improve regional economic activity, create jobs and reduce the logistics burden associated with concentrating production around Lagos and Ogun.
The latest investment figures nevertheless point to continued confidence among major manufacturers in Nigeria’s consumer market, with the food, beverage and tobacco sector accounting for the largest share of new manufacturing capital in 2025.
The challenge for policymakers now is to strengthen infrastructure and the broader business environment sufficiently to ensure that the growth in manufacturing investment extends beyond the country’s dominant industrial corridor.