Nigeria’s real sector has stagnated, contributing only 9-10 per cent to GDP, for 26 years since the nation’s return to democratic governance, according to Muda Yusuf, CEO of the CPPE.
In Yusuf’s review, Nigeria’s industrial sector has not transformed enough since 1999 to achieve sustainable economic growth, create jobs, boost exports, or reduce import dependence.
According to him, industrialisation remains the foundation of economic transformation, yet the democratic era has delivered only modest outcomes, leaving Nigeria heavily reliant on primary commodities and imported goods.
Yusuf highlighted the troubling decline in industrial capacity, exemplified by the collapse of Nigeria’s public refineries. He attributed this to poor governance, weak accountability, policy failures, and rent-seeking, which collectively undermined and shut down these strategic industrial assets.
He also pointed to the decline of once-thriving manufacturing industries, including textiles, tyre production, battery manufacturing and automobile assembly plants, many of which either contracted significantly or disappeared entirely over the years.
“The consequence has been a gradual weakening of Nigeria’s industrial base and growing dependence on imports for products that were previously manufactured locally,” he said.
Despite the challenges, Yusuf acknowledged notable industrial success stories. He described the cement industry as one of Nigeria’s most successful industrialisation achievements and commended the resilience of the food and beverage sector despite a difficult operating environment.
He also highlighted the Dangote Refinery as arguably the most transformative industrial investment in Nigeria’s recent history, noting that the project demonstrates the scale of ambition required to reposition Nigeria as a major manufacturing and processing economy.
However, Yusuf argued that these successes were largely driven by private sector initiative rather than a supportive policy environment.
“Many successful manufacturers have thrived not because conditions were favourable but despite formidable policy, regulatory and infrastructural obstacles,” he stated.
The CPPE chief identified unreliable power supply, inefficient logistics and high financing costs as the most significant barriers to industrial competitiveness. Manufacturers, he said, continue to spend heavily on self-generated power, while decades of underinvestment in rail infrastructure have increased dependence on costly road transportation.
He further noted that lending rates often ranging between 25 and 30 per cent remain incompatible with long-term industrial investment and expansion.
Yusuf also expressed concern over policy inconsistency, arguing that frequent shifts between protectionist and liberalisation policies have created uncertainty for investors and weakened industrial planning.
According to him, local manufacturers are additionally burdened by competition from imported goods produced in countries with lower production costs and stronger government support, while smuggling continues to undermine tariff protection measures.
He observed that Nigeria’s manufacturing landscape has increasingly become dominated by foreign-owned enterprises, particularly from Asia, raising concerns about the declining role of indigenous industrial players and the long-term sustainability of local industrial capacity.
On recent economic reforms, Yusuf acknowledged improvements in foreign exchange market liquidity, describing it as a positive development for manufacturers following the severe forex shortages experienced between 2022 and 2023.
He also commended the government’s fiscal policy framework, which grants import duty concessions on critical manufacturing inputs, raw materials, intermediate goods and industrial machinery, with tariff rates ranging from zero to 10 per cent.
According to him, the policy has the potential to lower production costs, improve productivity, encourage value addition and strengthen the competitiveness of local manufacturers in both domestic and export markets.
Looking ahead, Yusuf called for a new industrial compact anchored on competitiveness and long-term policy commitment.
He urged the government to accelerate power sector reforms, expand rail infrastructure, strengthen development finance institutions and provide concessionary financing to manufacturers.
He also advocated stronger local content policies, improved security across production corridors and greater emphasis on backward integration and resource-based industrialisation.
“Countries become industrial powers by transforming their natural resources into manufactured products, not by exporting raw materials and importing finished goods,” he said.
Yusuf concluded that Nigeria must transition from an economy driven by consumption and import dependence to one anchored on production, value addition and industrial competitiveness.
“The future of economic prosperity lies not in what Nigeria imports, but in what Nigeria produces. Manufacturing remains the bridge between natural resource wealth and broad-based prosperity,” he said.
He stressed that industrialisation remains critical to achieving economic sovereignty, sustainable prosperity and global competitiveness in the 21st century.
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