Nigeria's manufacturing sector stands at a critical crossroads as industry stakeholders project improved performance in 2026, following a modest recovery in 2025. For foreign investors considering manufacturing operations or partnerships in Nigeria, understanding both the opportunities and structural challenges is essential.
Current State of Manufacturing
Sector Snapshot
Contribution to GDP: Approximately 9%
2025 Performance: Modest recovery from 2024 lows
2026 Outlook: Cautious optimism with projected growth
Key Opportunities
Import Substitution
Nigeria imports over $20 billion in manufactured goods annually. Local production of consumer goods, building materials, and industrial inputs offers significant market potential.
Special Economic Zones
Free trade zones in Lagos, Calabar, and Kano offer tax incentives, duty-free imports of raw materials, and streamlined customs procedures for manufacturers.
AfCFTA Access
Manufacturing in Nigeria provides access to the African Continental Free Trade Area market of 1.3 billion consumers with preferential tariff treatment.
Structural Challenges
Foreign investors should be aware of persistent challenges that affect manufacturing operations:
- Energy supply remains inconsistent, with most manufacturers relying on expensive diesel generators
- Infrastructure gaps increase logistics costs and delivery times
- Access to foreign exchange for importing raw materials can be challenging
- Skilled labor availability varies by location and sector
I-STRATA Advisory
I-STRATA assists foreign manufacturers with site selection, partner identification, regulatory compliance, and incentive applications.