The Manufacturers Association of Nigeria has stated that the country’s manufacturing sector is grappling with severe macroeconomic pressures, leading to a sharp decline in its contribution to the national economy.

According to the association, manufacturing’s share of the economy has fallen dramatically from 29.9 percent in 1981 to just 8.2 percent in 2024, underscoring the scale of the sector’s long-term deterioration.

MAN disclosed this in its recently released report titled MAN State of Affairs, where it highlighted several indicators reflecting the worsening condition of the sector.

One of the key indicators cited was the sharp drop in the sector’s Value Added figure, which declined to $25.36 billion in 2024 from $55.9 billion recorded in 2023.

The association attributed this steep fall to the impact of soaring exchange rates, rising interest rates and persistent inflationary pressures affecting production costs.

The report further revealed that the sector’s real output growth slipped from 1.69 percent to 1.6 percent in the second quarter of 2025.

It added that manufacturing contributed only 7.81 percent to the Gross Domestic Product during the period, down from 9.62 percent previously recorded.

MAN also noted that the sector has suffered widespread business closures, with about 767 manufacturing companies shutting down as of 2023.

In addition, the association disclosed that approximately 18,000 job losses were recorded within the manufacturing sector in 2024, reflecting the deepening employment crisis.

The report observed that the cost of alternative energy, estimated at N6.76 billion, alongside raw material imports valued at N1.72 trillion in the first half of 2025, continues to place a heavy burden on operational expenses and employment levels.

MAN further stated that these cost pressures have significantly weakened the capacity of manufacturers to sustain production and retain workers.

“Also, high average lending rates of 36.6 percent, reduction in credit access to N7.72 trillion and rising unsold inventories of N1.04 trillion continue to limit performance,” MAN stated.

The association attributed the declining state of the manufacturing sector to what it described as a hostile macroeconomic environment.

It explained that the extremely high-cost operating environment is characterised by substantial foreign exchange losses, rising costs of raw materials and escalated borrowing costs.

MAN also identified multiple taxation, dilapidated infrastructure, a high level of insecurity and excessive regulation by government agencies as additional factors worsening the situation.

In response to these challenges, the association called for urgent policy actions aimed at reducing energy costs, strengthening foreign exchange liquidity and expanding access to affordable credit to stimulate sectoral growth.

MAN also advocated the creation of specialised financing mechanisms for the manufacturing sector.

It specifically proposed the establishment of a manufacturers’ bank that would provide long-term concessionary credit to operators within the sector.