Nigeria’s 4.43 per cent economic growth recorded in the second quarter of 2026 may appear encouraging on the surface, but the figures are masking serious challenges in the industrial sector, the Manufacturers Association of Nigeria (MAN) has warned.
The association said manufacturing and other industrial activities are losing ground as the services sector continues to account for a growing share of the economy.
The warning came as Senator representing Ogun East, Otunba Gbenga Daniel, argued that Nigeria’s economic progress should be judged by the everyday experiences of citizens rather than Gross Domestic Product (GDP) figures alone.
Daniel also stressed that economic strength and national security are closely connected, saying Nigeria cannot achieve sustained economic growth without security.
Services Drive Growth as Industry Slows
Reacting to the National Bureau of Statistics (NBS) Q2 2026 GDP report, MAN Director-General, Segun Ajayi-Kadir, said the 4.43 per cent year-on-year real GDP growth recorded during the quarter, compared with 3.89 per cent in Q1 2026 and 4.23 per cent in Q2 2025, does not tell the full story of the economy.
He pointed out that services accounted for 56.62 per cent of GDP during the quarter, while the broader industrial sector contributed 17.23 per cent and experienced a significant slowdown.
“The growth trajectory remains disproportionately service-driven (56.62 per cent of GDP), while the broader industrial sector (17.23 per cent of GDP) is visibly suffocating under severe structural headwinds,” Ajayi-Kadir said.
He described the decline in industrial growth as particularly concerning, noting that it dropped from 7.46 per cent in Q2 2025 to 3.96 per cent in Q2 2026.
According to him, the decline was largely linked to the electricity, gas, steam and air-conditioning supply segment, which contracted by 10.63 per cent during the quarter.
MAN also highlighted a decline in manufacturing’s contribution to real GDP, which fell from 9.57 per cent in Q1 2026 to 7.72 per cent in Q2. Real manufacturing growth also edged down from 3.29 per cent to 3.24 per cent.
High Production Costs Weigh on Manufacturers
Ajayi-Kadir attributed the weaker industrial performance to several challenges confronting manufacturers, including high production costs, exchange-rate pressures, expensive credit and rising electricity tariffs.
He warned that continued reliance on services and extractive activities could expose Nigeria to external shocks while doing little to expand the country’s productive capacity.
“Ultimately, headline GDP growth driven by non-tradable service activities will fail to strengthen foreign exchange reserves, reduce structural inflation, or create sustainable mass industrial jobs. A nation that trades and consumes what it does not produce builds prosperity on quicksand.”
MAN said the current trend could worsen employment vulnerability, fuel inflation, increase foreign exchange risks and contribute to the loss of industrial capacity and technological expertise.
MAN Calls for Urgent Industrial Reforms
To reverse the trend, the manufacturers’ body called for immediate action in key areas including electricity supply, industrial financing, foreign exchange access and local procurement.
Among its recommendations are direct power purchase agreements for industrial clusters, matching grants for manufacturers investing in solar and battery systems, credit guarantees to reduce lending costs and a dedicated foreign exchange clearance window for raw materials and capital equipment.
MAN also called for stronger enforcement of local procurement policies, incentives for vehicle assembly, tax relief for domestic supply chains and legally binding implementation of the Nigeria Industrial Policy.
Ajayi-Kadir said Nigeria needs to move urgently from consumption-driven growth towards production-led development.
He warned that without a stronger manufacturing base, positive GDP figures could remain disconnected from improvements in living standards and broader economic prosperity.
Daniel: Nigerians’ Experience Should Define Economic Progress
Speaking separately at the 7th Annual Lecture of Freedom Online in Lagos, Daniel said economic growth and national security cannot be treated as separate issues.
His comments followed the NBS report showing that Nigeria’s GDP grew by 4.43 per cent year-on-year in Q2 2026, compared with 4.23 per cent in the corresponding period of 2025.
While acknowledging that the latest figures, including improvements in agriculture and services, were positive, the former Ogun State governor said they did not fully capture the economic realities facing Nigerians.
“Nigeria cannot have a strong economy without security, and it cannot have lasting security without a strong economy, which effectively means that both of them are inseparable,” he said.
Daniel said genuine economic progress should be reflected in Nigerians’ ability to find decent employment, access their farms safely, run profitable businesses and invest with confidence.
He asked: “In our country today, can a young person find decent work? Can a farmer safely reach the farm? Can a manufacturer produce competitively?
“Can a small business survive the cost of power and transport? Can investors commit their resources with confidence?”
The senator described security as a critical part of Nigeria’s economic infrastructure rather than an issue that should be left solely to the military, police and other security agencies.
He noted that insecurity has immediate economic consequences. Farmers who cannot safely reach their farms, for instance, may be unable to produce enough food, while insecurity along major transport routes can drive up the cost of moving goods.
Daniel further warned that excessive security costs could hurt business competitiveness, while insecurity in local communities could discourage domestic and foreign investment.
The contrasting concerns from MAN and Daniel highlight the need for Nigeria to look beyond headline GDP figures and focus on strengthening productive industries, improving security and ensuring that economic growth translates into better living conditions for citizens.
