Nigeria’s manufacturing sector struggles as GDP growth crashes by 90.11%

This is according to the latest Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS).

The sector’s growth fell from 36.59% in Q3 2023 to a mere 3.62% in Q3 2024, reflecting significant challenges across its sub-sectors and highlighting the urgent need for remedial measures.

Despite recording a quarter-on-quarter growth of 31.67% in nominal terms, the sector’s contribution to nominal GDP dropped to 14.30% in Q3 2024, down from 16.18% in the same period the previous year.

The GDP report read: “Nominal GDP growth of the Manufacturing sector in the third quarter of 2024 was recorded at 3.62% (year-on-year), 32.97% points lower than the figure recorded in the corresponding period of 2023 (36.59%) and 1.72% points higher than the preceding quarter figure of 1.91%. 

“Quarter-on-quarter, growth of the sector was recorded at 31.67% during the quarter. The contribution of Manufacturing to Nominal GDP in the third quarter of 2024 was 14.30%, lower than the figure recorded in the corresponding period of 2023 at 16.18% and higher than the second quarter of 2024 at 12.68%.” 

Real GDP growth in the manufacturing sector was 0.92%, marginally higher than the 0.48% recorded in Q3 2023 but lower than the 1.27% achieved in Q2 2024.

The sector’s real contribution to GDP stood at 8.21%, a decline from 8.42% in Q3 2023 and 8.46% in Q2 2024.

The GDP report noted: “Real GDP growth in the manufacturing sector in the third quarter of 2024 was 0.92% (year-on-year), higher than the same quarter of 2023 and lower than the preceding quarter by 0.44% points and 0.35% points respectively. 

“The growth rate of the sector on a quarter-on-quarter basis stood at 6.74%. The Real contribution to GDP in the 2024 third quarter was 8.21%, lower than the 8.42% recorded in the third quarter of 2023 and lower than the 8.46% recorded in the second quarter of 2024.” 

The manufacturing sector comprises thirteen activities: Oil Refining; Cement; Food, Beverages and Tobacco; Textile, Apparel, and Footwear; Wood and Wood Products; Pulp Paper and Paper Products; Chemical and Pharmaceutical Products; Non-metallic Products; Plastic and Rubber Products; Electrical and Electronic; Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.

The sharp decline in the sector’s GDP growth underlines the persistent structural and operational challenges facing manufacturers in Nigeria.

These include limited access to foreign exchange, high production costs exacerbated by erratic power supply, and import dependency on raw materials.

Earlier this year, MAN projected a tough start for the manufacturing sector in 2024 but anticipated improvements towards the third quarter.

The Director General of the group, Mr. Segun Ajayi-Kadir, said that the prospect of recovery relies heavily on implementing policy stimuli and a synthesis of domestic growth through export-focused and trade strategies.

This approach is expected to enhance resilience, foster steady growth, and ensure the sector gains significant traction this year.

This approach is expected to enhance resilience, foster steady growth, and ensure the sector gains significant traction this year.