Manufacturing Falls To 7.7% Of GDP As Federal Govt Targets 25% By 2030

Nigeria’s manufacturing sector has seen its contribution to the economy plunge to 7.72 per cent, despite recording its strongest growth in four years, prompting the federal government to set an ambitious target of raising the sector’s share of Gross Domestic Product (GDP) to between 20 and 25 per cent by 2030.

President Bola Tinubu, who disclosed this yesterday in Lagos, said the decline from more than one-fifth of real GDP in the early 1990s underscored the urgent need to reposition manufacturing as the engine of Nigeria’s economic transformation.

The president spoke at the 6th Adeola Odutola Lecture and 54th Annual General Meeting of the Manufacturers Association of Nigeria (MAN), where he declared that Nigeria must move beyond importing finished goods and position itself as a major production hub for Africa.

Represented by the Minister of State for Industry, Senator John Owan Enoh, Tinubu said manufacturing output grew by 3.29 per cent in the first quarter of 2026 and 3.24 per cent in the second quarter, its strongest performance in four years.

However, despite the growth, the sector’s contribution to real GDP declined from 9.57 per cent to 7.72 per cent, while unsold manufactured goods accumulated to nearly N2 trillion.

The president said the figures showed that increased production alone would not be enough unless manufacturers could access markets, affordable finance, reliable energy and an enabling business environment.

He said government was therefore targeting a manufacturing contribution of between 20 and 25 per cent of GDP by 2030 as part of efforts to make Nigeria a competitive industrial economy.

Tinubu said, “Every great nation reaches a moment when it stops asking whether it can make things and starts deciding what to make for the world.

“Nigeria has made that choice.”

He said the federal government’s Nigeria Industrial Policy, launched in February 2026 and developed in collaboration with industry stakeholders, was designed to provide the framework for achieving the target.

According to him, the policy focuses on four sectors where Nigeria has significant comparative advantages: metals and solid minerals, oil and gas, construction, and manufacturing.

He added that the government was seeking to channel up to five per cent of GDP into industrial financing to support productive investment and expand the capacity of Nigerian businesses.

To drive implementation, Tinubu said the government had established the Industrial Revolution Working Group, co-chaired by the Minister of State for Industry and the president of MAN.

He said the group would operate under a performance scorecard focused on measurable outcomes, including factory reopenings, increased capacity utilisation, job creation and export growth.

The president also unveiled a five-point government-industry compact covering energy, capital, markets, security and accountability.

He said the government would prioritise gas supply for industrial users, provide longer-term financing through the Bank of Industry, enforce the Nigeria First procurement policy, protect industrial corridors and maintain quarterly engagements with MAN.

Tinubu said Nigeria could no longer afford to remain predominantly a consumer of imported products when the African market presented enormous opportunities for domestic manufacturers.

He said Africa’s 3.2 per cent share of global GDP and two per cent share of global manufacturing value added in 2024, despite accounting for about one-fifth of the world’s population, represented a major opportunity for Nigeria.

He added that the African Continental Free Trade Area (AfCFTA), with a market estimated at $3.4 trillion, offered Nigeria the opportunity to become a major manufacturing and export hub.

“Nigeria will not be Africa’s warehouse storing what others make. Nigeria will be Africa’s workshop, making what Africa needs,” he stated.

Tinubu said Nigeria must position itself to produce for Africa’s 1.4 billion people, arguing that the country had the population, natural resources, entrepreneurial base and market access required to lead continental industrialisation.

However, the president of MAN, Otunba Francis Meshioye, warned that achieving the 2030 target would require faster implementation of government policies and urgent intervention in the operating environment confronting manufacturers.

Meshioye called for the establishment of a Nigeria First Industrial Fund to provide concessionary financing to manufacturers, as well as a review of industrial electricity tariffs and stronger foreign exchange support for businesses.

He also urged the federal government to review provisions of the 2025 Tax Acts that could undermine manufacturing competitiveness and halt their retroactive application.

The MAN president further called for urgent resolution of the four per cent Free-on-Board levy and outstanding foreign exchange forward obligations, while demanding greater inclusion of manufacturers in economic policy negotiations.

Earlier, guest speaker and former director-general of the United Nations Industrial Development Organization (UNIDO), Dr Kandeh Yumkella, said Nigeria could not achieve meaningful industrialisation without resolving its power crisis.

Yumkella said the national grid currently supplied only about 5,000 to 6,000 megawatts against an estimated demand of more than 20,000MW.

He said the unreliable electricity supply had forced manufacturers to rely heavily on alternative energy sources, significantly increasing their production costs.

According to him, manufacturers spent an estimated N1.34 trillion on self-generated power in 2025, up from N781.68 billion in 2023, with energy now accounting for between 35 and 40 per cent of production costs.

Yumkella said Nigeria nevertheless possessed the fundamentals required to become an industrial powerhouse, citing its estimated 41.5 million micro, small, and medium enterprises, 215 trillion cubic feet of gas reserves, and 24 GW of hydropower potential.

He, however, noted that manufacturing still accounted for only about seven per cent of GDP, while exports of goods and services represented just 10.7 per cent of GDP.

The former UNIDO chief also identified weak penetration of regional markets as a major missed opportunity for Nigerian manufacturers.

He noted that only 3.4 per cent of Nigeria’s record $6.1 billion non-oil exports in 2025 went to ECOWAS countries, despite their geographical proximity and potential demand for Nigerian products.

He urged Nigeria to take the lead in regional value chains in refining and fertiliser production, pharmaceuticals and automobiles.

Yumkella said stronger industrial linkages, reliable infrastructure and targeted financing were necessary if Nigeria was to translate its resources and large domestic market into sustainable manufacturing growth.

The federal government’s 2030 target therefore comes against the backdrop of a manufacturing sector that is growing in absolute terms but losing ground in its contribution to the wider economy, with manufacturers simultaneously battling high energy costs, limited access to long-term finance, foreign exchange pressures, taxation and weak market demand.