MAN WARNS NIGERIA’S 4.43% GDP GROWTH HIDES MOUNTING PRESSURE ON INDUSTRY

The Manufacturers Association of Nigeria has raised concerns over the country’s latest economic growth figures, arguing that the 4.43 per cent expansion recorded in the second quarter of 2026 does not fully reflect the difficulties confronting manufacturers and other productive sectors of the economy.

The association said the latest Gross Domestic Product figures released by the National Bureau of Statistics presented an economy whose growth was increasingly driven by services, while industrial activity continued to face serious structural challenges. According to MAN, the headline growth figure should therefore be interpreted with caution because it does not adequately capture the pressure being experienced by businesses operating in the productive economy.

MAN Director-General, Segun Ajayi-Kadir, said the economy expanded by 4.43 per cent year-on-year in the second quarter, compared with 3.89 per cent in the first quarter of 2026 and 4.23 per cent recorded in the corresponding quarter of 2025. Although the latest figure represents an improvement, he argued that the composition of the growth raised important concerns about the strength of the productive sectors.

Services accounted for 56.62 per cent of Nigeria’s GDP during the quarter, while the broader industrial sector contributed 17.23 per cent. Ajayi-Kadir described the imbalance as worrying, maintaining that an economy seeking sustainable and broad-based development cannot rely disproportionately on services while industrial production continues to struggle.

The manufacturers’ group further disclosed that industrial-sector growth dropped sharply to 3.96 per cent in the second quarter, compared with 7.46 per cent recorded during the same period of 2025. MAN identified the electricity, gas, steam and air-conditioning supply segment as a major source of weakness, noting that the sub-sector contracted by 10.63 per cent during the quarter.

Manufacturing itself also recorded a decline in its contribution to real GDP. MAN said the sector’s share fell from 9.57 per cent in the first quarter of 2026 to 7.72 per cent in the second quarter. Real manufacturing growth also moderated slightly, moving from 3.29 per cent in the first quarter to 3.24 per cent in the second.

Ajayi-Kadir attributed the pressure on manufacturers to several factors, including elevated production costs, exchange-rate challenges, expensive borrowing and increasing electricity tariffs. He argued that these conditions were making it increasingly difficult for Nigerian manufacturers to compete effectively and sustain production.

The concerns raised by MAN highlight the difference between overall GDP performance and the condition of individual sectors. While the aggregate economy recorded stronger growth, the association believes that the figures should also be assessed against the ability of factories and other productive businesses to maintain operations, invest and create jobs.

The manufacturers’ position comes as Nigeria continues to implement economic reforms intended to stabilise the economy and stimulate growth. However, MAN’s assessment suggests that improvements in headline economic indicators need to be accompanied by measures that directly reduce the cost of production and improve the operating environment for businesses.

Electricity remains one of the major concerns for manufacturers because higher energy costs directly affect the prices of locally produced goods. Combined with elevated interest rates, currency-related pressures and other operating expenses, the challenges could continue to weigh on industrial expansion if they are not adequately addressed.

The association’s warning consequently places renewed attention on the quality and sustainability of Nigeria’s economic growth. For industrial operators, stronger GDP figures will have greater significance if they translate into improved production capacity, lower operating costs, increased investment and a more competitive manufacturing environment.

MAN’s assessment also suggests that policymakers may need to focus more closely on the productive sectors while pursuing broader economic reforms. Strengthening manufacturing and other industrial activities could help diversify the sources of economic growth and reduce excessive dependence on services.

With Nigeria’s economy recording 4.43 per cent growth in the second quarter, the latest figures provide evidence of continued expansion. However, MAN’s concerns underline the need to look beyond the headline number and address the structural challenges affecting manufacturers and the wider industrial economy.