Manufacturing is the most important of all the economic sectors in the country, and it generates about 10 percent of the Gross Domestic Product (GDP) each year. This industry, mostly concentrated in cities like Lagos, Port Harcourt, Abuja, and Ibadan, employs millions of people to produce various commodities, including consumer goods, household goods, cars, mining, agricultural, and cement building materials. Notably, the mainstays of the country’s industry are tobacco, food and drink, textiles, chemicals and fertilisers, wood, and building products like cement.
Food and beverage, cement, and Textile subsectors hold an important share of this immense market, contributing about 77 percent of industrial production. In addition to the sector’s health and economic impact are breweries and wheat mills. The country’s industrial sector has performed well in recent years, and the government’s policy change is driving growth and stimulating incentives. Initiatives such as validating foreign currency rules, facilitating cheaper funding, and encouraging the consumption of items made locally through import bans have increased interest in and Investment in domestic business.
Unstable power supply leads to increased manufacturing expenses.
Despite advancements, the country’s production sector faces major challenges, which include the unstable power supply, which increases operating expenses by requiring an extensive reliance on generators. Poor physical infrastructure, restricted financing availability, and high import costs for labour and raw goods further set back sustained expansion. The upset in the global supply chain has negatively impacted the nation’s economy. The sector’s susceptibility to external shocks has been exposed by the strains on capacity utilisation, employment retention, and domestic market supply caused by shortages of raw materials and intermediate inputs.
However, the economic upset has caused major shifts in consumer behaviour, which offers the country’s businesses opportunities and challenges. While businesses that depend on non-essential commodities experience demand drops and pressure to reduce costs, those flexible enough to recognise and adapt to these changes are well-positioned for success. Governments are adjusting their reliance on foreign suppliers, which led to the country’s current difficulty, signalling prospects for resilient domestic production. The country is well-positioned to benefit from this change because of its expanding population and human capital.
Global Solutions expects ongoing demand for skilled factory workers.
To fully realise this promise, one must embrace automation, essential to restoring production’s competitiveness. In addition to reducing the need for unskilled labour, automation is expected to create new job categories centred around digital competency. A more adaptable workforce, digitally enabled workspaces, tailored supply chains, and strong IT Infrastructure are just a few of the trends the production industry is expected to adopt in the next years. In light of this, Select Global Solutions anticipates a continuing need for qualified personnel in the factories sector. Supply chain strategists tasked with managing the shifting market dynamics will be in great demand, as will engineers, automation specialists, digital experts, and e-commerce professionals.
In addition to initiatives such as the Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian government has implemented the National Industrial Revolution Plan (NIRP) to support the growth of the country’s production sector. The plan focuses on key sectors like Agro-processing, textiles, and automotive industries, providing incentives, access to Finance through the Bank of Industry (BOI), and infrastructure development to enhance Productivity and competitiveness. Moreover, efforts to streamline regulatory processes, improve the ease of doing business, and promote partnerships with foreign Investors aim to create a conducive environment for manufacturers to thrive, drive industrial development, create job opportunities, and contribute to Economic Growth in the country.
Related Article: Manufacturing technology is needed for growth
As the country’s production business continues to navigate challenges and opportunities, Innovation and adaptation will be critical to its success. Embracing technology, developing talent, and building resilience are key strategies to help the sector thrive economically. By leveraging advancements in automation, digitalisation, and Sustainability practices, they can enhance productivity, improve operational efficiency, and meet evolving consumer demands. Investing in workforce training, promoting research and development, and improving collaboration with industry partners can further strengthen the sector’s competitive edge and ensure sustainable growth in the long run.