Nigeria’s manufacturing sector experienced a drop in its real contribution to the nation’s Gross Domestic Product (GDP) in 2025, reflecting persistent structural challenges, even amid modest improvements in production output.
Data from the National Bureau of Statistics (NBS) show that the sector contributed 8.05 per cent to real GDP in 2025, down from 8.24 per cent in 2024. The decline was mirrored in the fourth quarter, where the sector’s real contribution stood at 7.40 per cent, lower than the 7.62 per cent recorded in the same period of 2024 and below the 7.50 per cent of the preceding quarter.
While production activities posted marginal gains during the year, the overall weight of manufacturing in the economy continued to weaken. Real GDP growth within the sector was 1.13 per cent year-on-year in the fourth quarter of 2025, a slight drop from both the same quarter in 2024 and the third quarter of 2025. On a quarter-on-quarter basis, however, manufacturing output showed stronger performance, expanding by 9.01 per cent in Q4 2025.
Cumulatively, the sector recorded 1.41 per cent growth in real terms for the full year, an improvement over the 1.20 per cent achieved in 2024. Despite this incremental recovery in production, it was insufficient to prevent a decline in manufacturing’s overall share of GDP.
Nominal contribution of the sector to GDP also fell, standing at 8.46 per cent for 2025 compared with 8.85 per cent in 2024. In the fourth quarter, the sector contributed 8.34 per cent, down from 9.27 per cent a year earlier but slightly above the 8.06 per cent recorded in Q3 2025.
Analysts attribute the disparity between output growth and GDP contribution to structural constraints such as rising production costs, foreign exchange shortages, infrastructure gaps, and weak consumer demand.
Dele Oye, former President of the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), expressed concern over the sector’s declining GDP share. He identified key challenges including the high cost and limited availability of critical inputs like raw materials, energy, and foreign exchange, as well as weak domestic demand, rising inflation, and falling consumer purchasing power.
Similarly, Adewale-Smatt Oyerinde, Director General of the Nigeria Employers’ Consultative Association (NECA), cited government policies—particularly foreign exchange liberalisation—as contributing to the sector’s struggles. He noted that the policy has increased borrowing costs and import prices for machinery and raw materials, affecting a manufacturing industry heavily reliant on imported inputs.
Nigeria’s Manufacturing Sector Sees Decline in GDP Contribution Despite Slight Growth
