Nigeria’s economy recorded a 3.98% year-on-year growth in the third quarter of 2025, according to fresh data released by the National Bureau of Statistics on Monday, December 1, 2025.
The growth represents an improvement from the 3.86% recorded in the corresponding quarter of 2024, driven significantly by the agriculture, industry, and services sectors.
The NBS report showed that aggregate GDP at basic prices stood at N113.59 trillion in nominal terms, compared to N96.16 trillion in Q3 2024, representing a nominal year-on-year growth of 18.12 percent. In real terms, GDP stood at N57.03 trillion, up from N54.85 trillion in Q3 2024.
While the overall economic expansion reflects Nigeria’s continued recovery trajectory, the performance of the manufacturing sector offers important insights into the country’s industrial transformation and signals both opportunities and challenges for the year ahead.
Manufacturing’s Contribution to Q3 Growth
The manufacturing sector grew by 1.25% year-on-year in Q3 2025, representing an improvement from the growth recorded in the corresponding quarter of 2024. However, this figure marks a slight deceleration of 0.34% points compared to the 1.74% growth recorded in Q2 2025.
The sector contributed 7.62% to Nigeria’s total GDP in Q3 2025, down marginally from 7.81% in the preceding quarter and 7.82% in Q3 2024. Despite this slight contraction in GDP share, the manufacturing sector remained a critical component of Nigeria’s industrial recovery, accounting for significant value addition within the broader industrial sector.
The industrial sector as a whole recorded robust growth of 3.77% in Q3 2025, up substantially from 2.78% in the corresponding quarter of 2024.
This improvement of nearly one percentage point year-on-year underscores the strengthening of Nigeria’s productive capacity across manufacturing, mining, construction, and utilities.
Drivers of Manufacturing Growth in Q3
Several factors contributed to the manufacturing sector’s performance in the third quarter:
- Foreign Exchange Stability: The relative stabilization of the naira against major currencies during the period reduced input costs for manufacturers who depend on imported raw materials.
- Refined Petroleum Products Availability: The operationalization of the Dangote Refinery and gradual rehabilitation of state refineries improved domestic availability of refined petroleum products.
- Policy Support: Government initiatives including the Presidential Initiative for Unlocking the Healthcare Value Chain, local content policies, and executive orders providing tariff relief on imported machinery and raw materials provided some support to manufacturers navigating challenging operating conditions.
Challenges Constraining Manufacturing Growth
Despite the positive year-on-year growth, the manufacturing sector’s performance in Q3 2025 remained constrained by several structural and cyclical challenges:
- Energy Costs: Power supply remained Nigeria’s most persistent manufacturing constraint. With national grid supply remaining unreliable, manufacturers continued to depend heavily on self-generation using diesel and gas.
- Infrastructure Deficits: Poor road networks, congested ports, and inadequate rail systems increased logistics costs and delivery times. These infrastructure gaps not only raised production costs but also limited manufacturers’ ability to efficiently move goods to market and compete with imports.
- Multiple Taxation: Manufacturers continued to face multiple and sometimes overlapping taxes at federal, state, and local government levels. This complex tax environment increased compliance costs and reduced funds available for productive investment and expansion.
- Inflation Pressures: Although inflation moderated slightly during the quarter, elevated price levels continued to erode consumer purchasing power, dampening demand for manufactured goods, particularly discretionary items.
Looking Ahead: Prospects for 2026
As Nigeria approaches 2026, several factors like energy availability, foreign exchange stability, infrastructure and policy will shape the manufacturing sector’s trajectory.
For Nigeria to realize its industrial potential and achieve the economic transformation outlined in national development plans, manufacturing must grow significantly faster.
Achieving this requires sustained commitment to reform, strategic public and private investment, and recognition that manufacturing is not merely one sector among many but a critical driver of employment, technology adoption, and sustainable prosperity.
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