Nigeria’s manufacturing output hits N33.43 trillion in H2 2024 amid soaring inflation – MAN 

This development was disclosed by the Director-General of MAN,  Segun Ajayi-Kadir, during the release of the association’s “MAN Economic Review – Second Half 2024” on Monday in Lagos, News Agency of Nigeria (NAN) reports.

“Nominal manufacturing output rose sharply by 34.9 per cent to N33.43 trillion, primarily due to inflationary pressures and rising domestic prices,” he said.

Ajayi-Kadir noted that the report covered key industry performance metrics such as capacity utilisation, production output, inventory levels, local raw materials usage, investments, energy expenditures, and employment trends.

Ajayi-Kadir noted that capacity utilisation of the manufacturing sector improved marginally to 57.0 per cent in 2024, up from 55.1 per cent in 2023.

A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.

He revealed that the sector’s real manufacturing output increased modestly by 1.7 per cent year-on-year to N7.78 trillion.

In terms of real output, Nigeria’s manufacturing sector recorded a modest year-on-year growth of 1.7%, reaching N7.78 trillion in 2024. This improvement was largely driven by increased activities in the motor vehicles and miscellaneous assembly, non-metallic mineral products, and electrical and electronics sectors.

However, when compared on a half-year basis, real output declined by 3.1%, highlighting the persistent challenges faced by the sector, including rising production costs, weak consumer demand, and ongoing price volatility.

According to the report, local sourcing of raw materials in Nigeria’s manufacturing sector showed notable improvement, rising from 52.0% in 2023 to 57.1% in 2024.

This shift was primarily driven by the persistent scarcity of foreign exchange, high costs of imported inputs, and targeted government incentives aimed at promoting the use of domestic resources. Noteworthy progress was observed in sectors such as wood and wood products, textiles and apparel, footwear, and pharmaceuticals. However, the electrical and electronics segment continued to lag behind due to its heavy reliance on imported components.

On the investment front, real manufacturing investment declined sharply by 35.3% year-on-year to N658.81 billion, demonstrating the impact of economic uncertainties and weakened investor confidence.

Despite this overall drop, the second half of 2024 recorded a 19.4% uptick in investments compared to the first half, as some manufacturers cautiously resumed capital expenditures amid tentative signs of stability.

The report highlighted a worrying surge in unsold goods:

Employment remained relatively stable:

Electricity supply to industries showed significant improvement:

Electricity supply to industries showed significant improvement:

Despite this, manufacturers faced steep electricity costs:

Manufacturers also grappled with a surge in borrowing costs:

Ajayi-Kadir emphasized the need for policy stability, forex liquidity, energy cost reforms, and interest rate moderation to sustain manufacturing growth.

He urged the government to accelerate the implementation of manufacturing-friendly reforms and create a more predictable business environment.