Nigeria’s manufacturing sector ramped up investments in assets by 102.16 percent to N1,331.88 billion in 2025, from N658.81 billion in 2024, as manufacturers deepened backward integration and local sourcing to reduce exposure to foreign exchange illiquidity.
This is according to the 2025 report presented by Segun Ajayi-Kadir, director-general of the Manufacturers Association of Nigeria (MAN), at the association’s 54th Annual General Meeting (AGM) in Lagos.
The half-yearly breakdown showed a sustained momentum in the second half of the year. Real investment rose to N764.07 billion in H2 2025 from N567.82 billion in H1 2025, representing a 34.56 percent rise.
Ajayi-Kadir said the expansion reflects a deliberate strategic shift by manufacturers in response to persistent operating headwinds.
“The recorded expansion in manufacturing investment was evident in the manufacturers’ aggressive backward integration and local capacity expansion to dissociate operations from FX illiquidity,” he said.
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The surge comes as manufacturers have faced dollar scarcity, high energy costs, and rising logistics expenses. MAN has consistently flagged that dependence on imported raw materials leaves factories vulnerable to FX volatility and supply chain disruptions.
According to the DG, firms are now investing to produce what they previously imported, from agro-inputs to packaging materials and industrial raw materials, while expanding local milling, refining and processing capacity.
The second, he noted, was logistics. As energy costs and third-party haulage rates soared, manufacturers invested heavily in acquiring their own distribution fleets.
“In addition, as energy costs and third-party haulage rates soar, manufacturers invested heavily in acquiring their own fleets to exert control over distribution margins,” Ajayi-Kadir said.
Experts say the move to own fleets is about cost and certainty. With diesel prices elevated and road infrastructure weak, outsourcing haulage has become more expensive and less reliable. Owning trucks allows manufacturers to control delivery timelines and protect margins.
The 102 percent jump is significant because it came in a tight credit environment. Manufacturers borrowed at interest rates above 30 percent in 2025, with many firms citing the cost of credit as their top challenge in MAN’s CEOs Confidence Index reports.
Despite that, the data suggests manufacturers chose to invest their way out of constraints rather than scale back. The H2 acceleration to N764.07 billion indicates that firms that delayed capital expenditure in the first half due to FX reforms and inflation moved ahead in the second half as demand stabilised.
The investment pattern mirrors what large players have announced in the last 18 months. Food and beverage firms expanded local sourcing of grains, starch and sugar. Cement and building materials firms increased quarrying and local additives. Chemical and pharmaceutical firms invested in backward integration to intermediates.
For the broader economy, the rise in asset investment points to future capacity. Manufacturing contributed 8.05 percent to real GDP in 2025, according to the National Bureau of Statistics, and MAN has argued that increasing local value addition is critical to boosting that share and creating jobs.
But Ajayi-Kadir cautioned that sustaining the momentum will require policy support. He listed access to affordable raw materials, lower energy costs, and improved logistics infrastructure as priorities.
He said while manufacturers have demonstrated confidence by committing N1.33 trillion in assets, the operating environment must reward that confidence with stable FX, single-digit lending for industrial expansion, and incentives that make local sourcing cheaper than imports.
With food inflation still elevated and FX illiquidity easing but not gone, manufacturers say the logic for backward integration remains strong.
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Josephine Okojie-Okeiyi is a journalist with over five years’ reporting experience. She writes on industry, agriculture, commodities, climate change, and environmental issues. She is fellow of Thomson Reuters Foundation and Bloomberg Media Initiative for Africa.
