By Yinka Kolawole
Nigeria’s manufacturing sector recorded a decline in its real contribution to the nation’s Gross Domestic Product (GDP) in 2025, underscoring persistent structural challenges despite marginal improvements in output growth.
Data obtained from the National Bureau of Statistics (NBS) show that the sector contributed 8.05 per cent to real GDP in 2025, down from 8.24 per cent in 2024. The trend was also reflected in the fourth quarter of 2025, where real contribution stood at 7.40 per cent, lower than 7.62 per cent recorded in the corresponding period of 2024 and the preceding quarter.
The dip in real contribution highlights a gradual weakening of the sector’s weight in the economy, even as production activities posted slight gains during the year.
On the growth side, real GDP expansion in manufacturing stood at 1.13 per cent year-on-year in the fourth quarter of 2025. This represents a marginal decline compared to both the corresponding period of 2024 and the third quarter of 2025, indicating that output growth remains subdued. However, on a quarter-on-quarter basis, the sector recorded a stronger performance, growing by 9.01 per cent in Q4 2025.
Cumulatively, the manufacturing sector grew by 1.41 per cent in real terms in 2025, an improvement from 1.20 per cent in 2024. While this suggests a slight recovery in production, it was insufficient to prevent a decline in the sector’s overall share of GDP.
The sector’s nominal contribution to GDP also declined, standing at 8.46 per cent for the full year 2025 compared to 8.85 per cent in 2024. In the fourth quarter, it contributed 8.34 per cent, below the 9.27 per cent recorded a year earlier but slightly above 8.06 per cent in the third quarter.
Analysts say the divergence between growth and contribution reflects deeper issues, including rising production costs, foreign exchange constraints, infrastructure deficits, and weak consumer demand, which continue to limit the sector’s ability to expand its footprint in real terms.
Former President of National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye, lamented that contraction of manufacturing contribution to GDP is worrisome because the sector is a crucial driver of economic growth, job creation, and industrial development.
Oye said that factors responsible for the shrinking of the sector’s GDP contribution, among others, include: “Persistent challenges with the availability and cost of key inputs such as raw materials, energy (electricity and fuel), and foreign exchange. Others are weak domestic demand, high inflation, and declining consumer purchasing power.”
On his part, Director General of Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde, attributed the declining performance in the manufacturing sector to government policies such as the foreign exchange (FX) liberalisation policy. He argued: This is ill-suited for an economy and business environment heavily dependent on imports, as it has led to increased borrowing costs and escalating import prices for raw materials and machinery.
“These factors have significantly increased the cost of raw materials, productive machinery, and overall production, ultimately resulting in low sales and profitability for manufacturers.”
The post Manufacturing’s GDP contribution slips to 8.05% despite modest growth appeared first on Vanguard News.
