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By Merit Ibe, [email protected]
Sixty-six years after independence, Nigeria is still struggling to turn its vast natural resources, large market and abundant workforce into a strong industrial base.
From unreliable power and poor infrastructure to high production costs, policy inconsistencies and limited access to affordable finance, manufacturers continue to face daunting obstacles.
As the country marks 66 years, the long-promised industrial transformation remains largely unfinished.
In the beginning
Nigeria’s industrial journey began at independence in 1960 with a modest manufacturing base dominated by foreign-owned firms.
The government adopted import-substitution policies and successive development plans to promote local production.
The civil war disrupted growth, while the oil boom of the 1970s financed major public investments but also deepened dependence on petroleum.
The oil-price collapse triggered a severe industrial crisis in the 1980s, leading to the 1986 Structural Adjustment Programme and trade liberalisation.
Manufacturing recovered unevenly, while privatisation followed in the 1990s.
Since 1999, successive governments have introduced industrial policies, special economic zones and infrastructure initiatives, but power, finance, foreign exchange and policy challenges remain.
For an economy seeking to create jobs, expand domestic production and improve its competitiveness, the challenge goes beyond the formulation of industrial policies. It requires an enabling business environment in which manufacturers can invest with confidence, expand capacity, lower production costs and sustain operations over the long term.
For the Manufacturers Association of Nigeria (MAN), these require confronting the fundamental challenges facing the productive sector and maintaining a deliberate, consistent strategy for industrialisation.
The Director General of MAN, Segun Ajayi-Kadir, believes Nigeria has made some progress in developing indigenous manufacturing capacity since independence. However, he argues that the absence of a sustained and focused industrialisation strategy, combined with longstanding structural constraints, has prevented the country from translating its potential into the level of industrial development it desires.
Ajayi-Kadir’s assessment and other stakeholders highlight the opportunities available to Nigeria and the urgent need to address the obstacles standing between industrial ambition and economic transformation.
Nigeria’s industrialisation journey began against the backdrop of a colonial economy largely structured around the production and export of raw materials to support industrial development in Europe and America.
According to Ajayi-Kadir, the manufacturing base inherited at independence was relatively underdeveloped, leaving the new nation with the task of building domestic productive capacity and reducing its dependence on imported manufactured goods.
Successive governments subsequently introduced development plans and industrial policies designed to change this economic structure.
Among the initiatives were the Indigenisation Decree, import substitution and backward integration policies, alongside direct government participation in establishing industrial complexes and strategic projects.
The Ajaokuta Steel Complex and other major industrial ventures reflected the ambition to build an economy capable of processing its resources, producing essential goods and supporting a wider network of industries.
These initiatives helped create opportunities for indigenous manufacturers and expand domestic productive capacity.
The Ajaokuta Steel Complex and other major industrial ventures reflected the ambition to build an economy capable of processing its resources, producing essential goods and supporting a wider network of industries.
These initiatives helped create opportunities for indigenous manufacturers and expand domestic productive capacity. However, the industrialisation process was repeatedly disrupted by economic and policy challenges.
Ajayi-Kadir identified the emergence of the Structural Adjustment Programme (SAP), currency pressures, infrastructure deficits and an unstable operating environment as factors that placed additional burdens on manufacturers.
The effects, he noted, were particularly significant for businesses dependent on imported machinery, raw materials and other production inputs.
Although Nigeria has developed manufacturing capacity across several sectors, the MAN chief said the country had yet to achieve its full industrial potential.
He attributed this partly to the lack of a consistent, centrally focused industrialisation strategy capable of sustaining progress across successive administrations.
Today, as the government seeks to reposition the economy around domestic production, investment and value addition, the challenge is to ensure that industrial policies translate into tangible improvements in the operating environment.
Electricity challenge
Among the constraints confronting manufacturers, inadequate and expensive electricity remains one of the most significant.
For Ajayi-Kadir, power is fundamental to industrial development because virtually every manufacturing process depends on a reliable electricity supply.
He said MAN had consistently maintained that electricity costs could account for between 30 and 40 per cent of manufacturers’ cost structures, making power supply a major determinant of production costs and competitiveness.
“The binding constraints that continue to limit the pace of our industrial growth have persisted over the years, and a lot of work still needs to be done to realise our industrial aspirations,” he said.
The challenge extends beyond the availability of electricity to its cost and reliability. Manufacturers operating in an environment of inadequate grid supply must contend with the additional expense of alternative power sources, placing further pressure on operating costs.
For businesses competing with imported products, these expenses can undermine their ability to produce at competitive prices.
Addressing the problem, therefore, requires more than increasing electricity generation. It demands improvements across the entire power value chain, from generation and transmission to distribution and consumption.
Project Implementation Team Lead, Calabar and Gulf of Guinea Municipal and Trade Centre Limited by Guarantee, David Etim, said the country’s electricity challenge illustrates the broader weaknesses in its infrastructure development.
According to him, Nigeria must ensure that the transmission and distribution networks can effectively deliver the electricity generated to homes, businesses and industries.
“The country, therefore, has to address the entire value chain -from generation to transmission, distribution and ultimately consumption-if increased generating capacity is to translate into reliable power for households and industries,” he said.
One approach to addressing the problem is to decentralise electricity generation and distribution, allowing communities and industrial clusters to develop power solutions suited to their needs.
Solar mini-grids could support smaller industrial clusters, while gas-fired power plants could serve larger manufacturing hubs where natural gas is available. Small hydropower projects, biomass and biogas systems also offer possibilities in locations with suitable resources.
Hybrid systems combining solar power, battery storage and gas-powered generation could provide a more reliable supply, depending on local conditions and costs.
Such arrangements would not eliminate the need for an effective national electricity network. However, they could provide additional options for manufacturers operating in areas where grid supply remains unreliable.
For industrial clusters, access to dependable power could reduce production interruptions, improve capacity utilisation and strengthen the competitiveness of locally manufactured goods.
Infrastructure gaps
Beyond electricity, inadequate infrastructure continues to constrain industrial development.
Poor roads, inefficient ports, high logistics costs and inadequate supporting facilities increase the cost of moving raw materials to factories and transporting finished products to markets.
Etim argued that Nigeria’s infrastructure challenges were not always the result of an absence of facilities. In many cases, existing infrastructure had deteriorated because maintenance and upgrading had not kept pace with economic needs.
Much of the infrastructure supporting commercial and industrial activities today was constructed decades ago, leaving facilities under pressure from population growth, increased economic activity and changing demands.
He cited the country’s major ports, including Apapa, Tin Can Island, Warri, Onne and Calabar, as examples of infrastructure whose capacity and efficiency depend on continuous investment and maintenance.
Issues surrounding access roads, dredging, channels, breakwaters, equipment and maintenance have continued to affect port operations and the movement of goods.
“Where maintenance is postponed, infrastructure deteriorates, capacity falls and the cost of doing business rises,” he said.
The same concerns apply to the country’s road network, where delayed projects and inadequate maintenance can undermine the movement of goods and people.
Etim cited the Calabar-Itu road as an illustration of how infrastructure challenges can persist for years when construction and maintenance are not treated as continuous responsibilities.
Taxation and regulatory bottlenecks
The burden of taxation and regulatory compliance also remains a concern for businesses.
Ajayi-Kadir identified multiple taxation as one of the factors that have complicated the operating environment for manufacturers, although he acknowledged recent tax reforms as a significant step towards simplifying Nigeria’s tax system.
He said the consolidation of more than 60 tax laws into four pieces of legislation would provide greater clarity and reduce the uncertainty associated with overlapping tax requirements.
“This means that the days are gone when somebody could show up at your factory and claim that you had failed to comply with a law or regulation you had never heard of,” he said.
However, he maintained that regulatory bottlenecks continued to impede business growth, particularly where agencies established to support manufacturers and improve the business environment became additional obstacles.
The MAN director general expressed concern that some regulatory agencies appeared more focused on revenue generation than on helping businesses comply with standards and improve their operations.
He called for a shift towards a more supportive regulatory approach, arguing that regulators should see themselves as partners in industrial development.
“You should not be a headmaster; you should be a devoted teacher who is interested in helping manufacturers build their capacity, improve their competitiveness and achieve sustainable growth as corporate entities,” he said.
For manufacturers, a predictable regulatory environment is essential for investment planning, capacity expansion and long-term business sustainability.
Ajayi-Kadir urged regulatory institutions to facilitate compliance and encourage enterprise rather than impose practices that could weaken businesses’ ability to grow.
Institutional and moral question
While infrastructure, power and the cost of doing business remain immediate concerns for manufacturers, Etim argued that Nigeria’s industrial difficulties must also be understood within the broader context of institutional weaknesses and the erosion of public values.
He said the country’s development challenge was not simply whether it had made progress since independence, but whether it had addressed the underlying problems that had accumulated over the decades.
The questions, in his view, include whether institutions have been strengthened, whether productive work is adequately rewarded and whether the systems governing economic activity encourage enterprise and innovation.
At 66, he described Nigeria as a country with enormous natural and human resources but a long history of unresolved institutional and social challenges.
For him, national development requires more than economic growth figures or changes in political leadership. It requires the rebuilding of institutions and a system that rewards productive activity. He argued that corruption, weak accountability and the normalisation of corrupt practices had contributed significantly to the country’s inability to realise its potential.
“We have not achieved even three per cent of our potential as a nation, largely because of human failings.
“We have had two generations of Nigerians and perhaps even three, who have come to believe that a corrupt system is the only system available to us.”
He attributed this to what he described as a breakdown in the moral fabric of society, arguing that corruption had become normalised across generations. Etim maintained that addressing these problems would require a sustained effort to strengthen institutions, improve accountability and create an environment in which productive work and enterprise could thrive.
Reform, hardship and continuity
Nigeria’s current economic adjustments have generated significant concerns among households and businesses, but Etim argued that the country’s longstanding structural problems could not be resolved overnight.
He acknowledged the hardship associated with the recent reforms in the country but maintained that the effects of economic adjustments must be considered alongside the longer-term objective of establishing a more stable economic foundation.
“Is there hardship? Definitely,” he said. “But people like myself in the private sector, people who have worked hard and made something of their lives by pulling themselves up by their bootstraps, understand that good things do not come easily. No pain, no gain.”
He argued that macroeconomic stability was an important foundation for broader economic recovery, even though the process of achieving it could place pressure on households and businesses in the short term.
“You cannot start stabilising the micro without stabilising the macro. But when you are stabilising the macro, the micro will suffer. That is what we are seeing now,” he explained.
However, he acknowledged that mistakes had been made and that some policy decisions had generated concerns.
To him, the direction of economic policy should be assessed over a longer period, while recognising that the benefits of reform would depend on implementation and the extent to which improvements at the macroeconomic level translate into better conditions for businesses and households.
He also cautioned against expecting an administration to resolve, within four years, infrastructure and institutional deficiencies that had accumulated over several decades.
“Could they have accomplished everything that needs to be accomplished in four years? No. It is not possible,” he said.
For the private sector, he maintained, continuity and a discernible policy direction are important considerations in determining whether businesses can plan and invest with great confidence.
The task, therefore, is to sustain reforms while ensuring that the productive sector receives the infrastructure, financing and policy support needed to expand.
Unlocking opportunities
Despite the challenges, Nigeria’s large population and consumption market offer substantial opportunities for industrial growth.
Etim said the country had significant potential to expand manufacturing by serving domestic demand and taking advantage of markets across the African continent.
The African Continental free Trade Area (AfCFTA), he noted, offers Nigerian producers access to a wider regional market, creating opportunities for businesses capable of producing competitively at scale.
He argued that manufacturers do not necessarily have to look beyond Africa to find substantial opportunities for growth.
Even relatively simple products, he explained, could support viable businesses when produced for a large consumer market.
His example of toothpicks illustrated how the economics of manufacturing could change when production was directed at hundreds of millions of potential consumers rather than a limited domestic market.
He also pointed to the revenues generated by telecommunications companies and subscription-based businesses as evidence of the scale of consumer demand in Nigeria.
“You want to see it? Look at the revenues of the GSM companies. People are paying that money. The money did not fall from the sky,” he said.
For him, the opportunity lies in unlocking Nigeria’s latent purchasing power and directing a greater share of economic activity towards domestic production,investment and employment.
However, exploiting that market would require manufacturers to overcome the high cost of production, improve product quality and develop the capacity to compete with imported goods.
Reliable electricity, efficient transport infrastructure, access to finance and a predictable business environment would therefore remain essential to translating market size into industrial expansion.
Etim argued that Nigeria’s economic transformation should not be treated as the responsibility of the Federal Government alone.
While national policies shape the broader economic environment, state and local governments also have important responsibilities in providing infrastructure and essential services that support businesses and communities.
“Everybody keeps talking about Nigeria and everybody looks at Abuja,” he said. “But what about the sub nationals? What about the local governments? How many of us are holding our subnational governments to account for roads, schools and hospitals?”
He cited Abia State as an example of the possibilities that could emerge when attention was directed towards economic development at the subnational level, while acknowledging the role of the state’s current administration in seeking to change its economic trajectory.
For industrial development to take root across the country, states must also consider how their policies, infrastructure and investment decisions can support productive enterprise.
Industrial clusters, local resource processing and community-level power solutions could provide opportunities for states to develop economic activities around their comparative advantages.
This would require coordination among the different levels of government, the private sector and local communities.
It would also require stronger accountability for public resources and a clearer understanding of the role that subnational institutions play in creating an enabling environment for investment.
The road to industrial recovery
As Nigeria marks its 66th independence anniversary, the country’s industrial story remains one of considerable ambition, partial progress and persistent constraints.
The foundations for industrialisation are evident in its natural resources, population, entrepreneurial capacity and access to a potentially vast African market. Yet these advantages have not translated into the scale of productive activity that successive governments have sought to achieve.
For Ajayi-Kadir, overcoming the longstanding barriers requires a sustained focus on the fundamentals of industrial development, particularly electricity, infrastructure, supportive policies and a business environment that enables manufacturers to compete.
Etim believes the challenge is equally institutional. Nigeria must strengthen the systems that support productive work, confront corruption and ensure that development becomes a shared responsibility across all levels of government and society.
His perspectives point to the importance of continuity, effective implementation and a willingness to address structural weaknesses rather than repeatedly manage their consequences.
Etim believes Nigeria can still achieve its industrial aspirations, but insists that the process will require time and sustained commitment.
“So, is our potential enormous? Absolutely. Have we achieved it? No. Are we on the path towards achieving it? I believe so. Is it going to happen overnight? Definitely not,” he said.
“So, what do we do? In my opinion, we sustain the trajectory because I believe it will take us closer to the promised land than anything else anybody is promising.”
At 66, Nigeria’s industrial future will ultimately depend on whether the country can convert its abundant resources, large market and entrepreneurial energy into productive capacity.
The challenge is no longer simply to articulate the ambition to industrialise, but to sustain the policies, investments and institutional reforms required to make that ambition a reality.
Instead of developing strong value added industries, Nigeria continues to rely on imports for manufactured goods, leaving its local industries struggling to survive. This mismatch between abundant resources and limited industrial output has deepened unemployment, widened poverty, and weakened economic resilience.
Over the years, successive governments have introduced industrial policies and development plans, but implementation gaps, policy inconsistencies and governance challenges have slowed progress. As a result, Nigeria remains stuck at a slow pace of industrialization, far behind emerging economies that began their journeys around the same time. The urgent task before the country is to overcome these barriers and chart a clear, consistent path toward building a robust industrial base that can support inclusive growth and long-term prosperity.
For quick industrialisation, Nigeria needs to diversify the economy; develop infrastructure; encourage local manufacturing; add value to raw materials; invest in technology and innovation; improve human capital; create a friendly business environment; strengthen trade policies; public-private partnership; stable policies and governance – Long-term industrial policies should not change with every administration.
Nigeria has the potential to reinvent itself.
Etim says AfCFTA gives Nigeria a fresh new opportunity to reinvent itself.
“The shift in the world trade order where the actions of Donald Trump has basically thrown multilateralism to the wind, where it is now every man for himself and God for us all, in my opinion, I think this is an opportunity.”
Etim pointed out that a key strategic component of rapid industrialisation is the development of free trade zones, because free trade zones are microcosms of nation states that are purpose specific to industrialisation. That is how China industrialised.
“If we have our industries running, if we are producing, if we are farming, if we are feeding ourselves adequately, cheaply, personally, I believe that Nigeria’s issue should not be an issue of minimum wage but of a living wage and with a living wage, then we have high production which would then rapidly reverse inflation.
For the Centre for Promotion of Private Enterprise (CPPE), Nigeria’s economic journey this 66 years has been one of profound transformation, shaped by cycles of boom and bust, far-reaching reforms, recurring crises and enduring struggles with diversification.
Yusuf viewed that as the nation marks 66 years of independence, reflecting on this trajectory is essential to chart a more sustainable, competitive, and inclusive path for the future.
“Nigeria’s population of an estimated 230 million is both a significant opportunity and a daunting challenge. Infrastructure, roads, power, housing, education, and healthcare, remain grossly inadequate, undermining productivity and competitiveness. Aggressive infrastructure investment, leveraging public private partnerships and innovative financing models, is no longer optional but an urgent necessity”, he said.
To sustain reform momentum, Yusuf preferred that these measures must be complemented by targeted social protection programs, cash transfers, food security interventions, and job creation initiatives, to shield vulnerable households and maintain public support.
He said Nigeria must focus on deepening economic diversification: Scaling up value addition in agriculture, manufacturing, and solid minerals.
Yusuf believes these reforms, if complemented by social protection and infrastructure investment, could lay the foundation for industrial revival. “The current reform agenda presents a rare opportunity to reset the economy on a path of stability, competitiveness, and shared prosperity.”
