CPPE: Nigeria’s Manufacturing Sector Trapped in Low Growth Equilibrium

Nigeria's manufacturing sector has been trapped in a state of low growth for the past 26 years of its democratic rule, according to an assessment by the Centre for the Promotion of Democracy (CPPE). The sector has moved from "industrial promise to industrial erosion," with significant declines or complete disappearance of government petroleum refineries, tyre manufacturing, textile, and battery industries.

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Nigeria’s democratic journey has delivered only modest industrial outcomes, leaving the economy heavily dependent on primary commodities and imports.

Dr. Muda Yusuf, CEO of CPPE, stated that Nigeria's democratic journey has yielded only modest industrial outcomes, leaving the economy heavily reliant on primary commodities and imports. The manufacturing sector's contribution to GDP has remained between 9.0 and 10 percent for most of this period, indicating a lack of decisive industrial transformation despite numerous policy pronouncements and reform initiatives.

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One of the defining features of the democratic era has been the progressive erosion of industrial capacity across several sectors.

The collapse of public refineries is highlighted as a prime example of institutional dysfunction, stemming from poor governance, policy failures, and rent-seeking, leading to their complete shutdown. Similarly, textile mills that once employed hundreds of thousands have largely vanished, the tyre industry collapsed, and automobile assembly plants lost momentum. This has weakened Nigeria's industrial base and increased dependence on imports for domestically produced goods.

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The collapse of the nation’s public refineries remains perhaps the most striking example. What should have been strategic industrial assets became victims of poor governance, policy failures, weak accountability and entrenched rent-seeking.

The CPPE's report, "Manufacturing Under Democracy: A Story of Resilience Amid Structural Adversity," underscores the resilience of the sector despite structural challenges. However, it points to a persistent pattern of "industrial erosion" that has characterized the democratic era, hindering the nation's ability to achieve substantial industrialization.

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The story is similar across several manufacturing subsectors. Textile mills that once employed hundreds of thousands of Nigerians have largely disappeared. The tyre industry collapsed. Battery manufacturing faded. Automobile assembly plants lost momentum.