Nigeria’s economy is facing a worrying imbalance as new data reveals a widening gap between the booming services sector and the struggling real sector, made up mainly of manufacturing and agriculture. Industry stakeholders say the trend exposes deep structural flaws that are weakening the country’s chances of achieving true industrialisation.
Figures from the National Bureau of Statistics (NBS) show that manufacturing has contributed less than 9% on average to GDP between 2020 and 2024, while agriculture averaged around 25%. In sharp contrast, the services sector dominated with nearly 55% of GDP during the same period, rising further to 57.5% in early 2025. Experts warn that while services are expanding, the backbone of long-term growth—manufacturing—is shrinking.
The Manufacturers Association of Nigeria (MAN) blames persistent structural challenges such as poor power supply, weak infrastructure, access to finance, and high inflation that has eroded consumer purchasing power. Its Director General, Segun Ajayi-Kadir, said the recent GDP rebasing has only confirmed the fragility of the productive sector, with manufacturing shrinking by 0.76% on average between 2019 and 2024. “Our economy may look larger on paper, but it is not more productive nor more industrialised,” he stressed.
The Nigerian Economic Summit Group (NESG) echoed this concern, warning that the country is caught in de-industrialisation. NESG insists that without a shift from consumption to production, Nigeria will remain stuck in slow growth and import dependence. Industrialisation, it said, is the only viable path to jobs, exports, and inclusive prosperity.
Economist Prof. Akpan Ekpo added that manufacturing must contribute at least 40% to GDP before Nigeria can claim to have a resilient economy. He cautioned against over-reliance on services, which may paint a false picture of progress. His words: “Countries grow from agriculture to industry before services dominate. Skipping this process leaves the economy vulnerable.”
The picture is already grim. A report by Quartus Economics estimates that Nigeria’s manufacturing sector lost ₦1.2 trillion between 2019 and 2023. Foreign direct investment (FDI) into the sector has also collapsed, plunging to just $129.2 million in Q1 2025, down from $421 million the previous quarter—reflecting investor worries about policy uncertainty and structural bottlenecks.
Despite the challenges, analysts insist manufacturing still has the potential to drive Nigeria’s industrial future, but only if government prioritises policy reforms, energy reliability, infrastructure upgrades, and foreign exchange stability. Without this, they warn, the economy will continue to expand in statistics but remain hollow in productivity.
