Nigeria’s 4.43% Q2 growth Masks Deepening Industrial Crisis – MAN

The Manufacturers Association of Nigeria (MAN) has warned that Nigeria’s 4.43 per cent economic growth recorded in the second quarter of 2026 masks worsening challenges in the industrial sector.

MAN said the latest Gross Domestic Product (GDP) figures released by the National Bureau of Statistics (NBS) showed that the country’s growth remained heavily dependent on services, while manufacturing and other industrial activities continued to struggle.

According to Leadership, MAN Director-General, Segun Ajayi-Kadir, while reacting to the Q2 2026 GDP report, said the 4.43 per cent year-on-year real GDP growth, although higher than the 3.89 per cent recorded in the first quarter and 4.23 per cent in Q2 2025, concealed weaknesses in the productive economy.

Ajayi-Kadir, in a statement, said services accounted for 56.62 per cent of GDP during the quarter, compared with 17.23 per cent for the broader industrial sector.

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“The growth trajectory remains disproportionately service-driven (56.62 per cent of GDP), while the broader industrial sector (17.23 per cent of GDP) is visibly suffocating under severe structural headwinds,” he said.

According to him, industrial sector growth almost halved from 7.46 per cent in Q2 2025 to 3.96 per cent in the corresponding quarter of 2026.

He identified the electricity, gas, steam and air-conditioning supply segment as a major contributor to the decline, noting that it contracted by 10.63 per cent during the period.

The association also raised concerns over the performance of manufacturing, saying its share of real GDP fell from 9.57 per cent in Q1 2026 to 7.72 per cent in Q2.

Real manufacturing growth also eased slightly from 3.29 per cent in the first quarter to 3.24 per cent in the second quarter.

Ajayi-Kadir attributed the weak manufacturing performance to high production costs, exchange-rate pressures, high interest rates and rising electricity tariffs, which he said continued to undermine the competitiveness of Nigerian manufacturers.

He warned that continued reliance on services and extractive activities could expose the economy to external shocks without sufficiently expanding its productive capacity.

“Ultimately, headline GDP growth driven by non-tradable service activities will fail to strengthen foreign exchange reserves, reduce structural inflation, or create sustainable mass industrial jobs. A nation that trades and consumes what it does not produce builds prosperity on quicksand,” he said.

MAN said the trend could worsen employment insecurity, fuel inflation, increase the country’s exposure to foreign exchange shocks and further erode industrial and technological capacity.

To address the situation, the association called for urgent government intervention in electricity supply, industrial financing, foreign exchange allocation and local procurement.

Among its recommendations, MAN proposed direct power purchase agreements for industrial clusters and matching grants for manufacturers investing in solar and battery storage systems.

It also called for credit guarantees to reduce lending rates and the establishment of a dedicated foreign exchange clearance window for the importation of raw materials and capital machinery.

The association further demanded stronger enforcement of local procurement requirements, incentives for vehicle assembly, tax relief for domestic supply chains and the legally binding implementation of the Nigeria Industrial Policy.

Ajayi-Kadir said Nigeria needed to urgently shift from consumption-led to production-led growth, warning that without a stronger manufacturing base, rising GDP figures would have limited impact on the living standards of Nigerians.

He said impressive headline growth figures would remain largely disconnected from genuine economic prosperity unless the country strengthened its productive and industrial capacity.