Nigeria has secured the third position among Africa’s top ten manufacturing countries, according to a 2025 report by The African Exponent, a leading analytical business information source for entrepreneurs and investors. The report underscores Nigeria’s growing industrial prowess, driven by large-scale conglomerates and a robust domestic market. This ranking highlights the nation’s significant contributions to the continent’s manufacturing landscape, setting a benchmark for industrial excellence.
The African Exponent’s report identifies South Africa and Egypt as the top two manufacturing nations, followed by Nigeria, Morocco, Kenya, Algeria, Ethiopia, Ghana, Tunisia, and Zambia. Nigeria’s placement reflects its dominance in key sectors such as cement, consumer goods, food and beverages, and oil refining. Major players like Dangote Group, BUA Group, Nestlé Nigeria, and Unilever Nigeria have bolstered the country’s manufacturing output, leveraging its large population and resource wealth.
Nigeria’s manufacturing sector benefits from a population exceeding 200 million, providing a vast consumer base and a growing middle class. This demographic advantage supports demand for locally produced goods, particularly in fast-moving consumer goods like beverages and processed foods. The report notes that Nigeria’s beverage industry, particularly beer production, is the second largest in Africa, trailing only South Africa.
The Dangote Refinery, a flagship project, exemplifies Nigeria’s manufacturing ambitions. With a capacity to process 650,000 barrels of oil per day, it aims to reduce the country’s reliance on imported fuel and position Nigeria as a net exporter of refined petroleum products. Similarly, BUA Group’s expansion in cement production has strengthened Nigeria’s role as a leading cement manufacturer, meeting domestic demand and exporting to neighboring countries.
Despite its achievements, Nigeria faces challenges in sustaining manufacturing growth. High production costs, driven by an underdeveloped power sector, force many businesses to rely on expensive diesel generators. The African Exponent report projects Africa’s manufacturing sector to achieve a value-added output of $77.66 billion and a total output of $284.70 billion by the end of 2025, but Nigeria’s progress hinges on addressing infrastructure deficits.
Policy reforms have played a critical role in Nigeria’s manufacturing rise. The government offers tax incentives and customs duty exemptions for pioneer industries, including renewable energy and manufacturing. The African Continental Free Trade Area (AfCFTA), operational since January 2021, has opened new avenues for regional trade, though Nigeria’s full implementation remains pending legislative ratification.
Foreign direct investment (FDI) in Nigeria’s manufacturing sector has grown, driven by the country’s market size and natural resources like oil, gas, and agricultural products. However, the report emphasizes that Nigeria’s trade regime remains protectionist, with high tariffs and import prohibitions aimed at fostering domestic production. These policies have spurred growth but limit competitiveness in international markets due to high production costs and regulatory uncertainties.
The manufacturing sector’s growth is also tied to Nigeria’s economic diversification efforts. While oil contributes about 9% to GDP, it accounts for two-thirds of government revenue, highlighting the need for non-oil sectors like manufacturing to drive sustainable growth. The report cites Nigeria’s 2013 milestone when its re-emergent manufacturing sector became the largest in Africa, a position it has since leveraged to expand regional influence.
Smaller firms have contributed significantly to Nigeria’s manufacturing renaissance, particularly in producing low-cost goods like processed foods and textiles for domestic consumption. Unlike East Asia’s export-driven model, Nigeria’s manufacturing growth is primarily domestic-focused, supported by rising consumer demand. The African Exponent notes that this trend aligns with broader sub-Saharan African patterns, where manufacturing output doubled from $73 billion in 2005 to $157 billion in 2014.
Nigeria’s manufacturing sector faces competition from countries like Ethiopia and Rwanda, which are attracting FDI through competitive labor costs and special economic zones. Ethiopia’s textile and garment industries and Rwanda’s smartphone manufacturing highlight the diverse approaches to industrialization across Africa. Nigeria, however, benefits from its established industrial base and strategic reforms aimed at improving the business environment.
The World Bank and other development partners have supported Nigeria’s industrial growth through loans and technical assistance, focusing on infrastructure and job creation. Despite these efforts, challenges like high inflation (24.5% in 2023) and a depreciating naira continue to strain the economy. The African Exponent report underscores the need for Nigeria to enhance tax administration and mobilize domestic resources to finance structural transformation.
Nigeria’s manufacturing sector employs a relatively small share of the workforce compared to Asian counterparts, with fewer than one in ten workers engaged in manufacturing. This low employment rate reflects the sector’s capital-intensive nature and the prevalence of informal micro-enterprises. Addressing this gap requires investment in labor-intensive industries and skills training to absorb the 3.5 million Nigerians entering the labor force annually.
The report also highlights the role of Chinese investment in Nigeria’s manufacturing sector. Chinese firms have introduced new technologies and reduced prices for products by up to 40% through economies of scale. However, the report questions why local firms have not matched this progress, citing Aliko Dangote’s investments in oil refining, food processing, and cement as a model for African-led industrialization.
Nigeria’s manufacturing strengths are evident in its cement industry, led by Dangote Cement, which operates in ten African countries and is the continent’s leading producer. The food and beverage sector, driven by companies like Nestlé and Unilever, benefits from Nigeria’s agricultural resources, though the country remains a net food importer due to population growth outpacing agricultural productivity. Mechanization efforts are underway to reverse this trend and achieve food sufficiency.
The African Exponent report aligns with broader analyses, such as those from the World Bank, which project Sub-Saharan Africa’s growth to rise from 2.6% in 2023 to 3.4% in 2024. Nigeria’s manufacturing sector is a key driver of this recovery, supported by improved security and higher oil production. However, persistent challenges like insecurity, rising fuel costs, and exchange rate depreciation could hinder progress.
Nigeria’s ranking as the third top manufacturing country in Africa reflects its potential to become a regional industrial hub. Continued investment in infrastructure, regulatory reforms, and regional trade integration through AfCFTA will be critical to sustaining this growth. The African Exponent’s findings offer a roadmap for policymakers to attract private investment and create jobs, aligning with the African Union’s Agenda 2063 for sustainable development.
