The manufacturing sector in Nigeria is grappling with a troubling paradox: rising employment without commensurate productivity growth, underscoring deep structural weaknesses in the country’s industrial base.

Over the past two decades, the number of Nigerians employed in manufacturing has recorded a marginal increase but this has not translated into productivity gains as value added per worker trails peer economies.

Data from the United Nations Industrial Development Organization (UNIDO), based on World Bank national accounts and International Labour Organisation (ILO) employment statistics show that manufacturing employment grew from about 9 per cent in the early 2000s to roughly 14 per cent in 2023. However, this expansion in factory and agro-processing jobs has not translated into higher value creation per worker.

Available statistics reveal that Manufacturing Value Added (MVA) per worker – a key measure of productivity – has remained weak and volatile over the period. From a peak of about $678 in the late 1990s, it plunged sharply to $162 in 2000. Although productivity rebounded to $661 in 2014, it has since declined again, falling to approximately $224 in 2024.

This implies that more Nigerians are working in manufacturing, but each worker is generating significantly less value than in more productive industrial economies.

Industry analysts say this trend reflects persistent challenges, including low technology adoption, inadequate infrastructure, high energy costs, limited access to finance, and weak value-chain integration – all of which constrain output per worker despite rising headcount.

Nigeria’s experience stands in sharp contrast to industrialising economies across Asia and other emerging markets, where job growth has been matched by strong productivity gains.

Comparative data highlight the gap. India’s MVA per worker stood at $1,811 in 2023, while Indonesia recorded $804. South Africa, one of Africa’s most industrialised economies, posted $1,805 – all significantly higher than Nigeria’s levels, and achieved alongside expanding manufacturing employment.

Much of the increase in Nigeria’s manufacturing employment has occurred in micro and small-scale enterprises, but these firms are constrained by limited access to modern machinery, unstable electricity, high energy costs and limited access to affordable finance. Many operate in low-technology, labour[1]intensive subsectors such as food processing, furniture, textiles, leather, etc. While these firms absorb workers, they often lack the capital and technical support needed to improve efficiency or scale up production.

Economists warn that without productivity growth, rising manufacturing employment alone cannot drive industrial transformation, boost exports, or sustain wage growth.

They stress that for Nigeria to reverse the trend, policy must shift beyond job creation to focus on mechanisation, skills development, energy reliability, and industrial innovation – factors critical to lifting output per worker and strengthening the sector’s global competitiveness.