Nigeria’s manufacturing sector’s contribution to the Gross Domestic Product (GDP) grew marginally by two percent in the first quarter of 2025, driven by the country’s stable foreign exchange.
Data from the National Bureau of Statistics (NBS) showed that the manufacturing sector contributed 9.62 percent to the GDP in Q1 2025, which was higher than the 7.62 percent recorded in the fourth quarter of 2024.
The figure, however, dropped when compared to the 9.76 percent recorded in the corresponding quarter of 2024.
A series of far-reaching policy reforms by the Central Bank of Nigeria (CBN) has diversified the country’s FX sources to increase dollar inflows and improve access for manufacturers and retail users in recent months. It has boosted manufacturers’ and investors’ confidence in the Nigerian economy.
The easing pressure from foreign exchange (FX) markets in the first quarter of 2025 has signalled a recovery for manufacturers previously burdened by currency-induced losses.
BusinessDay survey of sixteen companies across six sectors—telecommunications, consumer goods, cement, breweries, oil and gas, and healthcare—revealed a dramatic drop in FX losses, from N951.7 billion in Q1 2024 to N28.7 billion in the same period this year.
The improvement in FX conditions has brought a degree of relief to our cost structure,” a senior executive at a leading FMCG company who spoke on condition of anonymity, told BusinessDay.
“While challenges remain, especially with access to dollars, the reduction in valuation losses on our dollar-denominated liabilities is significant.”
Read also: How CBN reforms ease inflation, stabilise FX, lift reserves to $37.93bn
“The worst of the FX-driven losses for corporates might be behind us if current trends persist,” said Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE). “The return of some measure of predictability in the FX market is a positive development for balance sheet planning and foreign investor sentiment.”
The aggregate Manufacturers CEOs Confidence Index (MCCI) of the Manufacturers Association of Nigeria (MAN) in the first quarter of 2025 declined but remained above the 50-point threshold.
This indicates a moderated optimism among manufacturing CEOs. “Despite a predicted slowdown in business activity for the first month of 2025, operators remain moderately optimistic by the expectations of a more stable exchange rate, halt in interest rate hikes, minimal decline in energy prices and the enactment of favourable Tax Reform Bills by Q1 2025,” the MCCI report stated.
The sector recorded a marginal growth in the first quarter of 2025. The real GDP growth in the manufacturing sector in the first quarter of 2025 was 1.96 percent year-on-year, higher than the same quarter of 2024 and higher than the preceding quarter by 0.11% points and 0.41 points respectively.
In nominal terms, the GDP growth of the manufacturing sector in the first quarter of 2025 was 42.40 percent year-on-year, 35.09 percentage points higher than the figure recorded in the corresponding period of 2024 (7.31percent) and 29.25 percentage points higher than the preceding quarter’s figure of 13.14 percent.
The contribution of manufacturing to nominal GDP in the first quarter of 2025 was 10.78 percent, higher than the figure recorded in the corresponding period of 2024 at 8.95 percent and higher than the fourth quarter of 2024 at 9.27 percent,” the NBS report stated.
