Manufacturing’s share of capital inflows shrinks to 2.76%

2026-03-03 - 06:16

...Despite 132% surge in total importation By Yinka Kolawole Capital inflows into Nigeria’s manufacturing sector suffered a sharp decline in the first nine months of 2025 (9M’25), even as overall capital importation into the country recorded a huge surge, figures from the National Bureau of Statistics (NBS) have shown. According to the data, capital importation into the production and manufacturing sector fell to $463.52 million between January and September 2025 (9M’25), representing a steep drop from the $1.01 billion recorded in the corresponding period of 2024 (9M’24) – a decrease of 54.11 per cent. The decline becomes more pronounced when measured against total capital inflows into the economy. Overall capital importation soared by 131.96 per cent year-on-year to $16.78 billion in 9M’25, up from $7.23 billion in 9M’24. This implies that manufacturing accounted for just 2.76 per cent of total capital importation in the period under review (9M’25), compared to approximately 13.97 per cent in the same period of the preceding year (9M’24) — highlighting significant erosion in the sector’s share of foreign capital inflows. Quarterly breakdown shows a mixed performance for the sector in 2025. In Q1, manufacturing attracted $129.92 million, followed by a decline to $72.25 million in Q2. In Q3, inflows rebounded to $261.35 million, bringing the cumulative total to $463.52 million. By contrast, in 2024 the sector recorded $191.92 million in Q1, surged to $624.71 million in Q2, and posted $189.22 million in Q3, culminating in the $1.01 billion total for the nine-month period. Meanwhile, total capital importation in Q3 2025 alone rose sharply to $6.01 billion, representing a 380.16 per cent increase compared to $1.25 billion recorded in Q3 2024 and a 17.46 per cent rise over Q2 2025. Analysts say the figures underscore a widening gap between overall investor appetite for Nigerian assets and actual foreign investment flowing into the real sector, particularly manufacturing — a development that could have implications for job creation, industrial growth and economic diversification efforts. In his reaction, Director General of the Manufacturing Association of Nigeria (MAN), Segun Ajayi-Kadir, attributed the decline to the binding constraints confronting the country’s manufacturing sector making foreign investors cautious of long-term investment in the production environment. “The Nigerian manufacturing ecosystem is not encouraging for investment due to persistent headwinds. “Foreign investors are increasingly cautious about committing to long-term manufacturing projects because of high production costs, macroeconomic instability, infrastructure gaps, double-digit interest rates and limited market linkages. “Structural, policy and economic constraints continue to discourage expansion and fresh investment. Foreign investors prefer sectors that are less exposed to Nigeria’s operational risks,” he stated. Ajayi-Kadir highlighted major constraints to include foreign exchange volatility, persistent inflation, rising input costs, unreliable electricity supply, poor transport infrastructure, inefficient ports, policy inconsistency, regulatory uncertainty, and security challenges.