•Blame costly loans, decrepit infrastructure, others •Say 18,000 jobs lost in 2024
•We’ve scaled up support for youth, labour-intensive sectors –DBN
From Uche Usim and Merit Ibe
Nigerian manufacturers and small business owners say their operations are gasping for air, as rising production costs, insecurity, policy inconsistencies, high foreign exchange, costly loans, dwindling consumer demand and weakening purchasing power threaten to push them downhill.
According to them, unless urgent interventions are implemented, Nigeria risks de-industrialisation and the attendant job losses and more business shutdowns (in addition to 767 lost in 2023).
The manufacturers said they are currently producing far low capacity as they battle mounting overheads, erratic power supply, multiple taxation and import bottlenecks, which weaken competitiveness and threaten the viability of local enterprises.
Their views were articulated and amplified by the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir at the BusinessesDay Manufacturing Conference 2025 held in Lagos at the weekend.
The MAN DG noted that macroeconomic headwinds, deficient infrastructure facilities and inadequacy of supportive government policies and incentives were battering manufacturers.
He maintained that the manufacturing sector performance had remained lacklustre as a result of numerous familiar binding constraints like unstable exchange rate, inadequate power supply/ high cost of energy, high inflation, insecurity, multiplicity of regulatory agencies and high regulation costs, high interest rate & poor access to credit, deficient infrastructure, high logistics cost, unfavourable trade policies and low patronage The MAN boss explained that available data showed that manufacturing capacity utilisation plummeted from 73.3% in 1981 to 57% in 2024 and its contribution to the economy has shrunk from 29.9% to 8.6% over the same period.
“Real growth has decelerated from 14.7% in 2014 to 1.38% in 2024, while non-oil export contributions have nose-dived from 82.37% in 2019 to 25.13% in 2024.”
Expressing dismay over the hostile business environment, he disclosed that as of 2023, 767 manufacturing companies shut down operations and over 18,000 jobs were lost in 2024 .
“This is evident in the country’s ranking of 97th in the Global Competitive Industrial Performance Index; an uninspiring 44 places below South Africa.” He advised that urgent action is therefore required to address the challenges bedevilling the sector to unlock its growth potential.
Commending the current administration’s efforts at improving production capacity and reforming the operating environment, he added that there was need for acceleration and effective coordination. The DG also pointed out the important role individual stakeholders have to play to unlock manufacturing potential and foster sustainable economic growth
To demonstrate commitment to industrial growth and reduce the mounting cost pressures on manufacturers, Ajayi-Kadir said the government should urgently consider a clear industrial policy, noting that a nation without an industrial policy is like a ship without a rudder.
“We must adopt a comprehensive policy framework that guides our industrial development, fosters growth and propels us towards a brighter economic future. Adopting the report of 2024 Manufacturers Summit on Rethinking the Nigeria Manufacturing Sector and MAN Blueprint 2.0 as working documents will fast-track the process.”
He further advised that the CBN should prioritise forex sales to manufacturers, honour the unsettled $2.4 billion forex forward contract and restrain commercial banks from harassing manufacturers on matters relating to outstanding forex forwards.
This, he said, will restore manufacturers’ confidence in the market and peg the exchange rate for calculating customs duty on raw materials, spare parts and machinery that are not available locally.
The MAN boss noted that the “Nigeria First” Policy must quickly move from initiation to government policy, lest it suffers the same fate as the Executive Orders 003 and 005.
“Nigeria must seize this moment to transform its manufacturing sector by prioritizing the patronage of local products. If we fail to nurture our own, we will forever be at the mercy of others.
“Cut the benchmark interest rates and actively deploy moral suasion for commercial banks to prioritize lending to manufacturers at single-digit concessionary interest rates”, he added.
Meanwhile, to accelerate inclusive economic growth, the Development Bank of Nigeria (DBN) has unveiled a plan to facilitate the creation of two million jobs through its robust support for Micro, Small and Medium Enterprises (MSMEs).
The bank said it is intensifying its strategic partnerships with financial institutions, expanding access to affordable funding and focusing on empowering youth and women entrepreneurs across labour-intensive sectors of the economy.
Speaking on the bank’s progress and ongoing initiatives, Dr. Tony Okpanachi, Managing Director of DBN, reaffirmed the institution’s core mission of providing wholesale financing to eligible financial intermediaries that lend directly to MSMEs.
“Our direct customers are the financial institutions. We lend to them, and they in turn lend to the MSMEs. Our Non-Performing Loan (NPL) ratio remains impressively low at just 0.002%. The risk resides primarily with these partner institutions, though we are beginning to observe signs of financial stress across the lending environment.”
Okpanachi emphasised DBN’s strong governance structure and focus on accountability.
“We have well-defined parameters that guide how funds are deployed. Monitoring and evaluation are built into our operations to ensure that disbursed funds are properly tracked and used for their intended purposes.
In response to the diverse needs of MSMEs, DBN, he said, has received funding requests from Primary Mortgage Institutions (PMIs), particularly to support small business owners with shop rentals and other infrastructure-related costs.
According to the Managing Director, the bank remains open to funding real estate developers as long as requests align with its mandate and are channeled through approved intermediaries like PMIs.
Beyond access to finance, he said DBN is also focused on driving social and economic equity.
“We have a particular interest in supporting women in business and youth-owned enterprises. We are positioning ourselves as a platform to provide not just debt funding, but equity support for young entrepreneurs,” Okpanachi noted.
He noted that the bank’s job creation strategy is rooted in identifying and supporting high-impact sectors.
“We are working closely with financial institutions to channel funds into areas like manufacturing, agriculture and other sectors that are labour-intensive.
“While technology remains important, we recognise that it doesn’t absorb as many workers. That’s why we are prioritising sectors with higher employment potential—there’s even a strategic livestock initiative currently in the works.”
Okpanachi also pointed to DBN’s role as a responsible corporate citizen. “We operate as a corporate entity and fulfil our civic obligations, including tax payments. We believe in leading by example and supporting the economic system from multiple angles.”