Nigeria’s manufacturing sector is among the largest in Africa with numerous opportunities. The COVID-19 pandemic which led to suppressed consumer demand and supply-chain disruption resulted in a decline in real manufacturing output in 2020. Prior to 2020, the sector has continuously facedseveralstructural challenges which have caused many manufacturing firms toshut down, limiting growthand investment inflows into the sector.
The Nigerian Economic Summit Group (NESG), in its 2021 Macroeconomic Outlook report, highlighted the manufacturing sector as aone of six sectors that have the potential to create jobs and reduce poverty in Nigeria. For the sector to achieve this, the NESG argues that private investment will play a major role.
From Nigeria’s recent experience, actual investmentsin manufacturingare realised when there is an intersection of market opportunities and government support. Nigeria’s reliance on imports, its large marketand the coming into effect of the African Continental Free Trade Area (AfCFTA) agreement present a hugeopportunityfor investmentinthe manufacturing sector, especially in areas such as agro-processing and light manufacturing.
For these opportunities tofully materialise,crucial actionsarerequired by the federal and state governments,some of whichincludedeveloping an industrial policy and sectoral plans for identified priority areas, ensuring commitment to implementation of existing plans, addressingthe challenge ofinsecurity, and providing targeted infrastructure