The Manufacturers Association of Nigeria (MAN) said the GDP rebasing had exposed a worrying trend – a less productive economy with a shrinking industrial base.
Manufacturing’s share of GDP had fallen from 27.65% in 2014 to 21.08% in 2024, with the sector contracting by 0.76% between 2019 and 2024.
According to media reports, in 2023 alone about 767 factories closed and 335 were in distress. Power shortages, limited access to affordable long-term financing, poor trade logistics, high input costs and policy inefficiencies were among the reasons.
MAN’s director-general, Segun Ajayi-Kadir, warned that Nigeria was shifting from production to low-value services, which risked undermining inclusive growth.
“The rebasing confirms that Nigeria’s economy may be statistically larger, but it is not more productive, nor more industrialised. Without a strong industrial base, GDP expansion may just become a hollow statistic,” Ajayi-Kadir said.
Economist Tella said the rebasing underscored the need to invest in production and strengthen manufacturing, rather than consumption.
“With services growing and manufacturing declining, Nigeria’s economic growth would be stunted,” he said.
“That is the difference between China’s economy and that of India. China’s economy is driven by manufacturing, while that of India is driven by services. China’s GDP is significantly larger than that of India. But we seem to be following the Indian model, which is not good for us,” he said.
He said that services, dominated by finance and information and communications technology, didn’t create as many jobs as manufacturing.
“If manufacturing grows, it will pull up agriculture and the services sector, create jobs and more Nigerians will be better off. The government would get more tax revenue,” Tella said.
Tinubu’s sweeping oil, gas and tax reforms have significantly increased government revenue. But it could be argued that the fallout has been economic hardship, with Nigerians facing a steep rise in the cost of living.