Nigerian manufacturers and small business owners are sounding the alarm over crippling operational challenges that threaten their survival. From rising production costs and erratic power supply to weak consumer demand and policy instability, many say their businesses are barely holding on.
At the 2025 BusinessDay Manufacturing Conference in Lagos, the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, painted a bleak picture of the sector. He revealed that local manufacturers are operating far below capacity due to skyrocketing overheads, security issues, limited credit access, and excessive taxes. According to him, if these issues are not urgently addressed, Nigeria may face a serious wave of de-industrialisation, with thousands more jobs at risk.
Ajayi-Kadir emphasized that Nigeria’s manufacturing contribution to GDP has declined dramatically—from 29.9% in 1981 to just 8.6% in 2024. Similarly, capacity utilization has fallen from 73.3% to 57% in the same period. Real sector growth dropped from 14.7% in 2014 to just 1.38% in 2024, while non-oil exports plunged from over 82% in 2019 to 25% in 2024.
As of 2023, 767 manufacturing firms had shut down, and over 18,000 jobs were lost in 2024 alone. Nigeria also trails South Africa by 44 spots on the Global Competitive Industrial Performance Index, ranking 97th globally.
Ajayi-Kadir called for a clear and unified industrial policy, warning that Nigeria cannot afford to steer its economy without direction. He recommended that the federal government adopt the 2024 Manufacturers Summit report and the MAN Blueprint 2.0 as guiding documents for industrial reform.
He also urged the Central Bank of Nigeria (CBN) to prioritize forex sales to manufacturers, settle the $2.4 billion forex forward backlog, and stop commercial banks from penalizing manufacturers for unresolved foreign exchange issues. Additionally, he recommended fixing a consistent exchange rate for calculating customs duties on essential imports not locally available.
To boost local production, he pressed for immediate implementation of a “Nigeria First” policy to replace Executive Orders 003 and 005, which failed to gain traction. He further advised lowering benchmark interest rates and encouraging banks to lend to manufacturers at single-digit, concessionary rates.
DBN Targets Two Million Jobs Through MSME Support
Amid the sector’s mounting crisis, the Development Bank of Nigeria (DBN) is taking steps to counterbalance the impact by supporting Micro, Small, and Medium Enterprises (MSMEs).
DBN Managing Director, Dr. Tony Okpanachi, announced plans to facilitate the creation of two million jobs by expanding access to finance, with a focus on youth and women-led businesses in labor-intensive sectors like manufacturing and agriculture.
Okpanachi explained that DBN operates through approved financial institutions, maintaining a low Non-Performing Loan (NPL) ratio of 0.002%. He noted that while signs of stress are beginning to appear across the lending ecosystem, DBN’s strict governance and monitoring systems ensure responsible fund deployment.
The bank is also responding to funding requests from Primary Mortgage Institutions (PMIs) to assist small business owners with infrastructure costs such as shop rentals. DBN remains open to funding real estate developers, provided applications are routed through its authorized partners.
Beyond funding, DBN is prioritizing inclusive growth, especially for youth and women entrepreneurs. The bank aims to move beyond debt financing into equity support and is actively working with financial institutions to fund high-impact ventures.
Okpanachi underscored the importance of focusing on sectors that can absorb large numbers of workers. “While tech is vital, it doesn’t generate the volume of jobs we need,” he said, hinting at a new strategic initiative around livestock as part of DBN’s efforts.
He concluded by affirming DBN’s commitment to national development, stressing that the bank not only pays taxes and meets its corporate obligations but also strives to lead by example in the Nigerian economy.
