Yemisi Izuora
The Manufacturers Association of Nigeria (MAN) has estimated that members of the Association operated in a more deplorable economic environment in 2024 leading exponential economic loss.
Inflation in Nigeria reached an alarming 34.6 per cent by November 2024, diminishing consumers’ purchasing power and causing a decline in demand for manufactured goods.
President of MAN, Otunba Francis Meshioye, while addressing the media during the 2025 edition of the MAN Media Personality Of The Year Award/Presidential Media Luncheon on Wednesday in Lagos, said the inflationary burden also led to an accumulation of unsold inventory, which rose to N1.4trillion across the manufacturing industries.
Meshioye, said at the same time, the floating of the exchange rate resulted in a steep depreciation of the Naira, which fell from ₦666/$ in mid-2023 to over ₦1700/$ by mid-2024.
This depreciation inflated the costs of imported raw materials and machinery, worsening the already strained profitability of manufacturers.
Interest rates he said reached unprecedented levels, climbing to 27.7 per cent by November 2024.
This increase substantially raised borrowing costs, making it harder for manufacturers to access financing for expansion and modernization.
The rising interest rates, combined with inflation, severely limited the potential for investment in the sector, impeding long-term growth prospects.
Additionally, manufacturers were hit hard with a drastic rise in electricity tariffs, with rates increasing by over 250 per cent, he said adding “This surge in energy costs became one of the highest operating expenses for businesses in the sector in 2024. As a result, many manufacturers sought alternative energy sources, further straining their financial resources and complicating their ability to remain competitive.”
Consequently, it cannot be far-fetched that the sector’s struggles were reflected in its decreasing contribution to Nigeria’s Gross Domestic Product (GDP).
Manufacturing’s share of the economy according to the President dropped significantly from 16.04 per cent in Q4 2023 to 12.68 per cent in Q2 2024, indicating a contraction in economic activity within the sector. The combination of high operational costs, reduced consumer demand, and limited access to finance contributed majorly to this decline.
He said, “In 2024, Nigeria’s manufacturing sector encountered a myriad of macroeconomic and infrastructural challenges that severely impacted its performance. The sector faced mounting pressure from high inflation, a depreciating Naira, rising interest rates, escalating electricity tariffs, record low sales, multiplicity of taxes and levies and militating security concerns. These factors collectively strained the sector’s profitability and curtailed its contribution to the nation’s GDP.”
The President commended his members for putting the government on its toes on the implementation of the right policies that are favorable to the survival of the real sector of the economy.
“As you are aware, a country that fails to develop its manufacturing sector will end up importing poverty and exporting wealth! This should not be the case for Nigeria, and that is why MAN is irrevocably committed to the facilitation of an environment that is conducive for manufacturing business in particular and economic development in general.
“In over five decades of our existence as business membership organization, we can attest to the important role you play in magnifying our research based advocacy, which has contributed to some of the successes we have achieved. We thank you for your unwavering support as you carry on with this partnership in the new year.”