Nigeria’s ambition to become a globally competitive manufacturing and export-driven economy continues to face major headwinds as persistent structural barriers threaten recent gains.
Despite marginal growth in the manufacturing sector’s GDP contribution in the first quarter (Q1) of 2025 largely attributed to foreign exchange reforms, industry leaders and trade experts warn that deep-rooted challenges including poor infrastructure, limited access to long-term financing, weak regulatory coordination, and lack of market intelligence continue to undermine growth.
They called for urgent, targeted reforms to revive investor confidence, scale local industries, and reposition Nigerian exports on the global stage, noting that these challenges are stalling export growth and limiting Nigeria’s capacity to integrate into global value chains.
Data from the National Bureau of Statistics (NBS) shows that the manufacturing sector contributed 9.62 percent to Nigeria’s Gross Domestic Product (GDP) in Q1 2025, an improvement from 7.62 percent in Q4 2024.
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However, this figure was lower than the 9.76 percent recorded in the same period last year, underscoring the fragile nature of the recovery.
Despite FX relief, logistical bottlenecks, lack of trade intelligence, poor documentation practices, and insufficient transport infrastructure are still limiting factors.
Ashish Khamka, chief financial officer at Lagos Free Zone (Tolaram Group), emphasised the need for better coordination among regulatory agencies. “We often have multiple agencies conducting inspections independently. A joint inspection board could streamline oversight and reduce inefficiencies,” he said.
He added that such collaborative models have driven export success in markets like India and Ghana.
Peter Olowononi, director of Client Relations for Anglophone West Africa at the African Export-Import Bank (Afreximbank), stressed that while Nigerian manufacturers are ramping up production capacity, the absence of critical infrastructure continues to stifle export prospects.
“Investors are already committed in terms of productive capacity. But moving goods from factory gates to ports or final buyers remains a major challenge, whether by road, rail, sea, or air. It’s not just hard infrastructure. Even soft infrastructure, like product testing and quality assurance, is missing in many areas,” Olowononi said
He noted that this gap prompted Afreximbank to establish the African Quality Assurance Centre (AQAC), a facility designed to help exporters meet international standards. “We’ve seen cases where products were rejected abroad for not meeting entry requirements. Exporters still aren’t fully aware of AQAC and similar platforms,” he added.
Highlighting logistics constraints, Olowononi cited the case of a Chinese order that took 78 days to reach Cameroon due to trans-shipment delays. “We need to build capacity to aggregate cargo volumes and facilitate direct shipping routes. The same goes for air cargo. Our domestic airlines lack the capacity to support branded exports.”
He proposed a collaborative financing model involving commercial banks and a national reserve fund to address these infrastructure gaps, which, according to him, is essential for moving both goods and services from production to global markets.
In May, Segun Ajayi-Kadir, director-general, Manufacturers Association of Nigeria (MAN), described the sector’s performance as ‘sub-optimal,’ attributing it to a litany of persistent constraints.
These include: unstable exchange rates, inadequate power supply, high energy and logistics costs, high inflation, insecurity, multiple regulatory agencies and overlapping charges, high interest rates, and poor access to credit. He also pointed to deficient infrastructure, unfavourable trade policies and low local patronage as major stumbling blocks.
Sheriff Balogun, president of the Nigerian-American Chamber of Commerce, emphasised the urgent need for trade intelligence systems powered by artificial intelligence (AI) to identify viable export markets and guide product development.
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“Before processing a product for export, businesses must understand where the demand lies. AI-powered trade intelligence tools can help match products with viable markets.
“Market access is not just about knowing general information; it’s about harvesting data to derive actionable insights for specific products. The Ministry of Trade must lead in establishing a national trade intelligence facility,” Balogun said
He recounted a recent case where a processor of sesame seed oil was unable to sell his products due to lack of market research.
“We advocate ‘process’ instead of ‘export raw.’ but you must first identify where the demand is, what the market needs, and then support producers accordingly,”
Balogun also warned against policies that penalise exporters engaged in value addition. “We should be incentivising, not punishing them. Processing can yield more returns than raw exports, but only if it’s guided by real-time market intelligence and supportive legislation.”
Louise Odom, executive director, Zenith Bank, pointed to flaws in export documentation and payment systems. “Many exporters avoid letters of credit, leaving them financially exposed. Proper documentation and secure payment mechanisms are essential to build credibility and ensure returns,” he said.
