Binding constraints slow manufacturing growth at 1.25% in Q3’25

Nigeria’s manufacturing sector continued to struggle in the third quarter of 2025, growing by only 1.25%, according to new GDP data from the National Bureau of Statistics (NBS). Although this represents a slight improvement compared to the same period in 2024, it is still weaker than the previous quarter. The sector’s contribution to national GDP also declined to 7.62%, down from 7.82% in Q3 2024 and 7.81% in Q2 2025.

Several subsectors performed poorly, especially textiles and apparel, which remained in recession with a contraction of 2.41% due to high production costs and widespread smuggling. Paper and pulp also shrank by 1.07%. These weak subsector results pulled down overall manufacturing performance.

Manufacturers continue to face multiple structural challenges, including high energy and transportation costs, expensive borrowing rates, dependence on imported raw materials, and competition from smuggled goods. According to Dr. Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE), these problems undermine competitiveness, limit job creation, and make growth difficult to sustain.

Yusuf emphasized that although Nigeria’s broader economy is on a slow recovery path—supported by improved macroeconomic stability and growth in services, ICT, finance, and construction—manufacturing and other key sectors still need significant policy support. He recommended several measures: improving energy supply, reducing logistics and port inefficiencies, boosting infrastructure development, curbing smuggling, lowering import duties on industrial inputs, and expanding access to concessionary credit.

He added that addressing long-standing structural barriers in manufacturing, agriculture, and trade is essential for achieving more inclusive and sustainable economic growth. With continued reforms and targeted investments, Yusuf believes Nigeria can achieve stronger economic outcomes in the coming months.

       Vanguard, 9 Dec 2025