Warning Signs for 2025: GDP Data Reveal Manufacturing Sector Under Pressure

The National Bureau of Statistics has reported a decline in the manufacturing sector’s contribution to Nigeria’s Gross Domestic Product (GDP) for the first quarter of 2025, signaling continued structural challenges despite marginal improvements in certain economic indicators. According to the newly released GDP figures, the sector accounted for 9.62% of real GDP, compared to 9.76% in the corresponding period of 2024.

While year-on-year performance showed a slight dip, the quarter-on-quarter analysis revealed some recovery. In the fourth quarter of 2024, manufacturing’s contribution had fallen to 7.6%, meaning the first quarter of 2025 recorded a 2% improvement over the preceding quarter. Analysts attribute the modest rebound to a period of relative exchange rate stability, which provided operational relief to a sector largely dependent on imported raw materials and equipment.

During the first quarter, the naira appreciated slightly, moving from ₦1,535 to the dollar in January to ₦1,532 by the end of March—representing a marginal gain of 0.2%.

The report also noted robust nominal growth within the sector. Year-on-year, nominal GDP in manufacturing grew by 42.40%, a sharp rise compared to 7.31% recorded in Q1 2024 and 13.14% in the previous quarter. Manufacturing’s share of nominal GDP stood at 10.78%—higher than the 8.95% recorded in the same period in 2014 and an increase from 9.27% posted in Q4 2024.

Meanwhile, the trade sector showed mixed signals. In real terms, trade grew by 1.8% year-on-year but fell short of the 2.3% growth seen in the same period last year. It also registered a slight 0.3% decline from the previous quarter’s figure. Trade’s share of real GDP dropped to 18.2% from 18.5% a year ago but showed an increase over Q4 2024’s 17.2%.

In nominal terms, trade expanded by 9.1% year-on-year, yet its contribution to nominal GDP decreased to 15.5%, down from 16.8% in Q1 2024 and 19.2% in the previous quarter.