Nigeria’s manufacturing sector has sunk deeper into deficit, as imports of manufactured goods outpaced exports by more than N14tn in the first half of 2025. The latest data from the National Bureau of Statistics highlight the scale of the country’s industrial crisis and reinforce calls for urgent government action to reverse the trend.

According to the NBS, the value of manufactured goods imported between January and June stood at N15.39tn, while exports during the same period amounted to just N1.09tn. This created a deficit of N14.3tn in only six months, continuing a long-standing imbalance that underscores Nigeria’s reliance on foreign products.

Although exports rebounded in the second quarter, rising to N803.81bn—up 173 per cent from the first quarter and 67.17 per cent year-on-year—industry players warned that the growth is insufficient to offset the flood of imports.

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 told The PUNCH.

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. The structural weaknesses behind Nigeria’s manufacturing deficit are not new. Stakeholders pointed to chronic issues: 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. “It is not just about exporting; your products must be competitive compared to those from other countries,” he added.

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 per cent of operating costs in some industries. The unreliable national grid has forced many factories to depend on diesel generators, raising expenses.

Idahosa said the way forward lies in 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. “Some industrial estates are signing agreements with power producers for a steady supply. That is where progress is being made,” he noted.

He urged the Federal Government to fast-track licensing for independent producers and resolve community disputes that often stall power projects. One policy option gaining momentum is the Nigeria First initiative, which mandates government ministries, departments, and agencies (MDAs) to prioritise local products in procurement.

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. “If you impose higher tariffs on imports where there are domestic substitutes, it will push demand towards local goods,” he said.

However, Ajayi-Kadir admitted that without a detailed breakdown of imports, it is difficult to measure the exact impact. Still, he insisted that government procurement alone could play a major role in bridging the gap.

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.

He also flagged inconsistent product standards as a major barrier. Many Nigerian goods fail to meet the technical specifications required in international markets, further limiting access.

While government policies are important, stakeholders emphasised that the private sector must play a leading role in finding solutions. Idahosa noted that many Nigerians misunderstand the role of policy. “Government policy is policy. It is Nigerians who must use that policy to create value. By itself, policy will not do anything,” he said.

He pointed to examples of manufacturers pooling resources to generate power independently. “Some manufacturers are getting licences to produce their own electricity. That is the way forward,” he argued.

Idahosa also encouraged companies to form partnerships and joint ventures in renewable energy, raw materials, and logistics. “We must stop waiting for the government and start building solutions within the private sector. That is how advanced economies became competitive,” he added.

Both MAN and LCCI leaders agreed that closing Nigeria’s manufacturing deficit will require a multi-pronged strategy. This includes reviving raw material industries such as cotton, palm oil, and petrochemicals to cut import dependence, 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.

The road to industrial revival is steep, but stakeholders believe the solutions are within reach—if government and industry act with urgency.