Nigeria’s manufacturing sector has sunk deeper into deficit, with imports of manufactured goods outpacing exports by over N14 trillion in the first half of 2025.

According to the National Bureau of Statistics, the value of manufactured goods imported between January and June stood at N15.39 trillion, while exports during the same period amounted to just N1.09 trillion.

This created a deficit of N14.3 trillion in only six months, continuing a long-standing imbalance that underscores Nigeria’s reliance on foreign products.

The Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, described the figures as a troubling confirmation of what manufacturers have repeatedly warned about.

“This deficit is simply a confirmation that domestic manufacturing is still struggling, and more needs to be done to mitigate the widening gap,” Ajayi-Kadir said.

Similarly, the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the numbers reflect the depletion of Nigeria’s production capacity.

According to him, “The N14tn deficit in manufacturing in H1 2025 is due to an imbalance in raw materials. Manufacturers are increasingly dependent on imports because there are insufficient local supplies.”

Stakeholders noted that the widening deficit puts pressure on the foreign exchange market, contributes to naira depreciation, and erodes the sector’s role in driving economic growth. They pointed to chronic issues such as low competitiveness, lack of raw materials, high energy costs, weak export infrastructure, and inconsistent policies.

Ajayi-Kadir explained that the deficit is not only a result of consumer choices but also of government procurement patterns.

“This also has to do with heavy purchases for government contracts and infrastructure projects. Domestic production is still low, and our inability to compete has continued to constrain exports,” he said.

He noted that poor export intelligence, weak port infrastructure, and regulatory bottlenecks further weaken Nigerian products abroad.

Idahosa agreed, stressing that manufacturers face a “double whammy” of insufficient raw materials and high energy costs. “We have reduced production of inputs like cotton and palm oil. As a result, manufacturers import at very high costs while also battling power challenges,” he said.

Energy remains one of the biggest burdens on manufacturers, accounting for up to 40% of operating costs in some industries.

To address this issue, Idahosa suggested leveraging reforms that allow states and private entities to generate and distribute electricity.

“The government has devolved power to the states. For the private sector, it is now about choosing the level of participation in power generation and distribution,” he explained.

He cited examples of industrial estates in Lagos, Imo, Abia, and Edo States that have adopted independent power supply arrangements.

Ajayi-Kadir argued that government expenditure could significantly reduce the deficit if redirected toward local industries.

“The government remains the largest spender. If MDAs start buying more local products, it will lower the gap. Seasonal purchases, particularly when contracts are executed, can shift demand toward domestic industries,” he said.

He also suggested raising tariffs on imported products with local alternatives.

Despite modest export gains in Q2 2025, Nigerian goods still face major hurdles abroad. Exporters struggle with high logistics costs, delays at ports, restrictive regulations, and a lack of market intelligence.

“We do not have enough information and intelligence about available markets abroad. Government agencies should be supporting manufacturers with data and trade missions. Without this, our products cannot compete with cheaper and more efficient alternatives,” Ajayi-Kadir said.

Both MAN and LCCI leaders agreed that closing Nigeria’s manufacturing deficit will require a multi-pronged strategy. This includes reviving raw material industries, reducing energy costs through independent power generation, and faithfully implementing the Nigeria First policy.

Ajayi-Kadir concluded that the figures confirm a persistent challenge but also highlight a path forward. “The deficit confirms that domestic manufacturing is still struggling. But with the right policies and private sector action, we can begin to close the gap,” he said.