Nigeria’s manufacturing sector has experienced a significant downturn in its contribution to the nation’s Gross Domestic Product (GDP) over the last two quarters, marking a steep decline of 20.95% from the end of 2023 through the second quarter of 2024.
According to recent data released by the National Bureau of Statistics (NBS), the sector’s share of the GDP dropped from 16.04% in the fourth quarter of 2023 to 12.68% in the second quarter of 2024.
This notable reduction reflects the growing difficulties faced by the manufacturing industry amidst Nigeria’s broader economic challenges.
The sustained decline during the first half of 2024 highlights the sector’s increasing vulnerabilities, particularly as it grapples with persistent economic and infrastructural issues.
These challenges have not only hampered growth but have also exposed deeper structural weaknesses within the industry, which are critical to address if the sector is to regain its footing and contribute more robustly to Nigeria’s economy.
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Nigeria’s manufacturing sector has seen a sharp decline in its GDP contribution, dropping from 16.04% in Q4 2023 to 12.68% in Q2 2024.
The sector’s nominal GDP growth also fell significantly, from 29.90% in Q2 2023 to just 1.91% in Q2 2024. Real GDP growth further declined to 1.28% in Q2 2024, with the sector’s contribution to overall GDP shrinking to 8.46%. These declines reflect the sector’s ongoing struggles with economic challenges and stagnation in output.
Despite its diverse activities, including food, oil refining, beverages, textiles, and cement production, Nigeria’s manufacturing sector has struggled to maintain its previous output and GDP contribution.
According to the Manufacturers Association of Nigeria (MAN), 767 manufacturing companies shut down in 2023, while 335 others faced distress due to economic challenges like exchange rate volatility and inflation.
The sector’s struggles highlight broader issues such as power supply, access to finance, and infrastructural deficiencies. While Nigeria’s GDP grew by 3.19% in Q2 2024, surpassing the previous year’s growth, the manufacturing sector continues to lag.
MAN emphasizes that recovery depends on policy implementation and export-focused strategies to drive growth and resilience. Meanwhile, Comercio Partners warns that the slowdown in the non-oil sector, particularly in manufacturing and agriculture, could pose risks to Nigeria’s economic stability.