Democracy Day: Manufacturing Yet To Drive Economic Transformation, Stagnates At 10% Of GDP – Centre

The Centre for the Promotion of Private Enterprise (CPPE) has said Nigeria’s manufacturing sector has failed to become a strong driver of economic transformation 26 years after the return to democratic rule, remaining stuck at about nine to 10 per cent of Gross Domestic Product (GDP).

In a statement titled “Manufacturing Under Democracy: A Story of Resilience Amid Structural Adversity,” the Centre noted that despite several policy pronouncements and reform efforts over the years, the sector has remained in a persistent low-growth pattern.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said Nigeria’s industrial base has not expanded meaningfully under democratic governance, leaving the economy heavily dependent on primary commodities and imports.

“Twenty-six years after the return to democratic governance, Nigeria’s manufacturing sector remains largely trapped in a low-growth equilibrium. The sector’s contribution to GDP has hovered around nine to 10 per cent for most of the period, underscoring the absence of a decisive industrial transformation despite successive policy pronouncements and reform initiatives,” he said.

Yusuf stressed that industrialisation remains central to economic development, noting that it creates quality jobs, deepens value addition, strengthens export competitiveness, and reduces exposure to external shocks.

However, he lamented that Nigeria’s democratic journey has only produced modest industrial outcomes.

“Yet, Nigeria’s democratic journey has delivered only modest industrial outcomes, leaving the economy heavily dependent on primary commodities and imports,” he added.

He pointed to the collapse or decline of once-thriving industrial assets such as public refineries, textile mills, tyre and battery plants as evidence of long-term industrial erosion, arguing that structural inefficiencies and policy uncertainty have constrained manufacturing growth.

Despite these challenges, Yusuf said there are still pockets of resilience and potential within the sector that could serve as catalysts for broader industrial revival.

He highlighted the cement industry as a major success story, while noting the steady growth of the food and beverage subsector as evidence of adaptability within a difficult operating environment. He also described the Dangote Refinery as a landmark investment capable of repositioning Nigeria’s manufacturing and processing capacity.

Yusuf, however, stressed that unlocking the sector’s full potential would require urgent structural reforms.

He called for significant improvement in power supply, saying reliable and affordable energy remains critical for industrial competitiveness. He also advocated investment in logistics infrastructure, particularly rail transport, to reduce the high cost of moving goods.

According to him, addressing high financing costs is equally important, as access to affordable credit would encourage long-term industrial investments.

He further emphasised the need for a stable and predictable policy environment to restore investor confidence, alongside stronger border enforcement to curb smuggling and protect local industries from unfair competition.

Yusuf added that a coordinated long-term strategy focused on strengthening indigenous manufacturing over the next two decades would be essential to reposition Nigeria’s economy for sustainable industrial growth.