Weak Manufacturing Base Threatens Nigeria’s Economy — CPPE Warns

Nigeria's Manufacturing Sector Faces Persistent Structural Challenges

Despite Nigeria's modest economic growth in Q1 2026, the manufacturing sector's weak performance has raised concerns. Nigeria's real GDP grew by 3.89% year-on-year in Q1 2026, but the manufacturing sector recorded a modest growth of only 3.29%. This growth is largely driven by petroleum refining, food and beverages, cement, chemicals, and pharmaceuticals.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, warns that the economy can't achieve durable structural transformation without a stronger manufacturing base. He stresses that industrialisation remains the most sustainable pathway to large-scale job creation, export competitiveness, and inclusive growth. Dr. Yusuf notes that the manufacturing sector contributes less than 10% to GDP, indicating persistent structural challenges.

The CPPE boss further identifies a major structural imbalance in the economy. He notes that while the non-oil sector contributes about 96.08% of GDP, it accounts for less than 15% of foreign exchange earnings due to weak export competitiveness and limited integration into global value chains. Dr. Yusuf calls for a stronger manufacturing base to achieve sustainable economic transformation. He highlights the importance of industrialisation in creating large-scale jobs, enhancing export competitiveness, and promoting inclusive growth.

Dr. Yusuf explains that the prolonged crisis in the textile industry has serious implications for employment, household incomes, industrial linkages, and poverty reduction. He warns that the decline of labour-intensive industries such as textiles poses a significant threat to the nation's economy and its people. The textile industry's prolonged crisis is evidence of worsening de-industrialisation and the erosion of Nigeria's domestic productive capacity.

The Centre for the Promotion of Private Enterprise will continue to advocate for a stronger manufacturing base to promote sustainable economic transformation in Nigeria. The CPPE will engage with policymakers to address the structural challenges facing the manufacturing sector and promote inclusive growth.

Dr. Muda Yusuf is a renowned economist and CEO of the Centre for the Promotion of Private Enterprise. He has extensive experience in policy analysis and development, and has published several papers on economic development and policy. Dr. Yusuf has also served as a consultant to various international organisations and has provided policy advice to governments in Africa and other developing regions.

The Centre for the Promotion of Private Enterprise is a leading think tank in Nigeria, known for its research and advocacy on economic policy and development. The CPPE is committed to promoting sustainable economic transformation in Nigeria through evidence-based policy advocacy and research.

Nigeria's economy has been growing modestly, but experts say that without a stronger industrial base, the economy may struggle to achieve inclusive growth and promote large-scale job creation.