Nigeria’s manufacturing sector is grappling with one of its worst trade imbalances in recent years, as fresh data from the National Bureau of Statistics (NBS) shows that imports of manufactured goods exceeded exports by over N14 trillion in the first half of 2025.
The widening Nigeria’s manufacturing trade deficit underscores the deep-rooted structural challenges facing the country’s industrial base and has raised concerns about the long-term sustainability of the economy.
Nigeria’s manufacturing trade deficit worsens in H1 2025. According to the NBS, between January and June 2025, imports of manufactured goods surged to N15.39 trillion, while exports were a meagre N1.09 trillion, creating a trade deficit of N14.3 trillion.
Although exports rebounded in the second quarter, climbing to N803.81 billion—a 173 percent rise compared to the first quarter and a 67 percent increase year-on-year—the growth was not nearly enough to offset the overwhelming import bill.
The figures highlight Nigeria’s heavy reliance on foreign goods and the limited competitiveness of its domestic manufacturing industry, both of which have contributed significantly to the ballooning Nigeria’s manufacturing trade deficit.
Industry leaders raise alarm, the Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, described the numbers as “a troubling confirmation” of what manufacturers had long warned about.
“This deficit is proof that domestic manufacturing is still struggling, and urgent action is needed to mitigate the widening gap,” he said.
Similarly, the President of the Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, pointed out that the imbalance reflects the declining production capacity of local industries.
He attributed much of the deficit to the dependence on imported raw materials and high energy costs.
“The N14 trillion deficit in Nigeria’s manufacturing trade deficit is largely due to an imbalance in raw materials.
Local supplies are insufficient, and manufacturers are left with no choice but to import at very high costs,” Idahosa explained.
Structural weaknesses deepen the gap, experts argue that the roots of Nigeria’s manufacturing trade deficit are not new.
The country’s industrial sector has long faced challenges such as low competitiveness, unreliable energy supply, poor export infrastructure, and inconsistent government policies.
Ajayi-Kadir noted that the problem is not just about consumer choices but also about government procurement patterns.
“Heavy purchases for infrastructure projects often rely on imports because domestic production is low. If government agencies prioritized local products, the deficit would shrink,” he said.
Stakeholders also highlighted poor export intelligence, weak port infrastructure, and regulatory bottlenecks as major barriers that prevent Nigerian goods from competing in international markets.
One of the biggest burdens on local industries is energy, which accounts for as much as 40 percent of operating costs in some sectors.
The national grid’s unreliability has forced many manufacturers to depend on costly diesel-powered generators.
According to Idahosa, the way forward lies in leveraging recent reforms that allow states and private entities to generate and distribute electricity.
He pointed to industrial estates in Lagos, Imo, Abia, and Edo that have entered into agreements with independent power producers to ensure reliable energy supply.
“This is where progress is being made. Manufacturers must increasingly take advantage of opportunities in independent power generation,” Idahosa said.
One promising strategy to address Nigeria’s manufacturing trade deficit is the “Nigeria First” initiative, which mandates government ministries, departments, and agencies (MDAs) to prioritize local products in procurement.
Ajayi-Kadir believes that redirecting government expenditure to domestic producers would significantly cut the deficit.
“The government remains the largest spender. If MDAs purchase more locally made goods, it will boost demand for domestic industries and reduce our reliance on imports,” he stressed.
He further suggested raising tariffs on imported goods where local substitutes exist, thereby encouraging consumption of Nigerian products.
Despite modest export gains in Q2 2025, Nigerian products continue to face serious obstacles abroad.
Exporters battle with high logistics costs, frequent delays at ports, lack of international market intelligence, and failure to meet global product standards.
“We need stronger support from government agencies in terms of trade missions, data, and information about available markets.
Without these, our products will remain uncompetitive against cheaper alternatives,” Ajayi-Kadir warned.
While many stakeholders agree on the importance of government policies, they insist the private sector must take the lead in creating sustainable solutions.
Idahosa urged Nigerian manufacturers to form joint ventures, pool resources, and invest in renewable energy and raw material development.
“Government policy alone will not solve the problem. It is Nigerians who must use these policies to create value.
By collaborating and innovating, manufacturers can become more competitive,” he said.
Both MAN and LCCI leaders acknowledged that closing Nigeria’s manufacturing trade deficit requires a multi-pronged strategy.
This includes reviving raw material industries such as cotton, palm oil, and petrochemicals; reducing energy costs through independent power generation; and fully implementing the Nigeria First initiative.
Ajayi-Kadir concluded, “The deficit confirms that our manufacturing sector is still weak.
But with the right mix of policy reforms and private sector action, Nigeria can begin to close the gap and rebuild its industrial base.”
For Nigeria, the challenge is daunting but not insurmountable. If both government and industry act with urgency, the road to industrial revival could still be within reach.
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