Manny Ita –
Foreign investment in Nigeria’s production and manufacturing sector recorded a sharp 54.11 percent decline during the first nine months of 2025, falling to $463.52 million from the $1.01 billion recorded in the corresponding period of 2024. According to data released by the National Bureau of Statistics (NBS) and corroborated by the Manufacturers Association of Nigeria (MAN), this significant downturn occurred despite a massive 131.96 percent surge in total capital importation into the country, which rose to $16.78 billion. Analysts report that the overwhelming majority of these new inflows—upwards of 80 percent—were directed toward short-term portfolio investments in the banking and financing sectors, leaving the industrial base with just a 4.35 percent share of total foreign capital.
The Manufacturers Association of Nigeria has expressed grave concern over the widening gap between financial market liquidity and real-sector growth, attributing the retreat of foreign direct investment (FDI) to persistent structural hurdles. Segun Ajayi-Kadir, the Director-General of MAN, noted that the current production environment remains prohibitive for long-term commitments, stating, “The Nigerian manufacturing sector’s ecosystem is not encouraging for investment due to persistent headwinds in the production environment. The foreign investors are wary of long-term manufacturing commitments in the country due to production cost risk.” The association further highlighted that the sector’s contribution to the national GDP has eroded significantly over the decades, falling from nearly 30 percent in the early 1980s to just 8.2 percent in 2024.
While some economic analysts suggest the decline in foreign capital may be partially offset by a structural shift toward domestic financing, industry leaders maintain that the high cost of energy, volatile exchange rates, and infrastructure deficits continue to drive capital flight. The President of MAN, Francis Meshioye, underscored the severity of the operational challenges facing local producers, remarking, “We faced mounting pressure from high inflation, a depreciating naira, rising interest rates, escalating electricity tariffs, record-low sales, a multiplicity of taxes and levies, and serious security concerns. The sector has been under siege.” Despite the federal government’s introduction of the Nigeria Industrial Policy 2025 aimed at stimulating the real sector, stakeholders warn that the current reliance on “hot money” portfolio inflows poses a risk to long-term industrial stability and employment.
