Nigeria’s Raw-material Trap Threatens Jobs, Productivity, Says NESG

Nigeria’s vast resources, large consumer market and youthful population have yet to translate into broad-based industrial prosperity, as the country remains trapped in a pattern of exporting raw materials and importing finished products.

The Nigerian Economic Summit Group (NESG) said the structural imbalance is suppressing value creation, limiting employment opportunities and exposing the economy to the damaging effects of commodity-price cycles.

The group will place the challenge at the centre of discussions at the 32nd Nigerian Economic Summit, scheduled for October 26 and 27, 2026, in Abuja.

The summit, themed “Growth that Works: Delivering Jobs, Productivity and Shared Prosperity,” will use its “Produce Nigeria” track to examine how the country can move from being primarily a producer of unprocessed commodities to becoming a competitive, high-value industrial hub.

The Produce Nigeria dialogue is expected to bring together manufacturers, agro-industrialists, investors, policymakers and technology innovators to develop practical measures for improving productivity, strengthening domestic value chains and attracting long-term capital.

Productivity gap deepens

The NESG said Nigeria’s continued export of raw materials and importation of finished goods had suppressed value creation, limited job opportunities and increased the economy’s exposure to commodity-price shocks.

It identified low productivity, poor infrastructure, regulatory inefficiencies, weak institutions and inadequate financing as major barriers to industrial growth.

Agriculture, which employs about 36 per cent of Nigeria’s labour force, remains one of the sectors with the greatest potential for value addition.

However, farmers continue to face limited access to certified inputs, mechanisation, extension services, storage and reliable markets.

The NESG said post-harvest losses for several food commodities were estimated at between 30 and 40 per cent, resulting in the destruction of billions of naira in value annually.

The summit will examine how agro-industrialisation, processing plants, storage facilities and farm-to-market value chains can reduce food losses, create manufacturing jobs and lower Nigeria’s import bill.

Cocoa, cassava, rice, sesame and soya are among the commodities identified as having strong potential for higher-value domestic processing and exports.

Manufacturing constraints

The NESG also raised concerns about the decline in Nigeria’s manufacturing competitiveness, citing high energy costs, import competition and the absence of a coordinated industrial policy.

Manufacturers have consistently identified unreliable and expensive electricity as one of their most serious operational constraints.

The Produce Nigeria discussions will consider special economic zones, fiscal incentives for value-added production, local-content policies and targeted financing for manufacturers.

The summit will also examine how digital manufacturing and Industry 4.0 technologies can help businesses improve efficiency and compete in regional and global markets.

Redirecting investment

The NESG said capital had historically flowed towards sectors with faster returns, including financial services, real estate and trading, while manufacturing, agro-processing and industrial infrastructure remained underfinanced.

It said development-finance instruments, blended finance, risk-sharing mechanisms and improved incentives would be needed to direct more capital into productive sectors.

Nigeria’s technology ecosystem could also support the transformation through precision agriculture, digital logistics, electronic payments and data-driven supply-chain management.

However, the NESG noted that digital innovation would need to extend beyond urban technology hubs to reach farmers, manufacturers and small businesses across the country.

The summit’s central challenge will be to convert policy discussions into measurable reforms that reduce production costs, improve infrastructure, strengthen domestic value chains and create jobs.

The NESG said the annual summit remained a platform for public-private dialogue on policies capable of driving Nigeria’s economic transformation.