Economists Warn Nigeria’s Shrinking Industrial Base Threatens Long-Term Growth

By Julian Osamoto

Economists are warning that Nigeria’s shrinking industrial base could worsen poverty and unemployment, unless the government adopts deliberate and sustained policy measures, despite recent economic reforms.

Speaking at a one-day sensitisation workshop on the newly released Rebased Gross Domestic Product and Consumer Price Index data from the National Bureau of Statistics NBS, organised by Center for the Study of the Economies of Africa (CSEA), Prof. Adeola Adenikinju, President of the Nigerian Economic Society, described current data on the economy as “concerning,”

He noted that manufacturing’s share of GDP has fallen from about 18–19% in past decades to just 8% today. “You cannot build a sustainable, strong economy of Nigeria’s size without a robust industrial sector,” Adenikinju said.

“A weak industrial base means poverty and unemployment will persist. We must protect and strengthen both the manufacturing and agricultural sectors through deliberate, long-term policies, rather than short-term, inconsistent measures.”

He criticised policy reversals, such as abrupt border closures and reopening, which he said discourage investment and called for consistent development planning, closer links between universities and industry, as well as research-driven agricultural productivity.

Prof. Uche Uwaleke, Professor of Finance and Capital Markets, attributed the industrial sector’s contraction, from 27% to 21% of GDP to Nigeria’s “weak productive capacity,” citing UNCTAD’s eight pillars: human capital, natural capital, energy, transport infrastructure, ICT, strong institutions, private sector development, and structural transformation.

“You cannot industrialise when your education system is misaligned with industry, electricity generation is barely 3,000 megawatts, and corruption undermines investor confidence,” Uwaleke said.

He warned that Nigeria’s dominance of low-productivity services; such as hospitality and fuel retail limits wage growth and economic resilience.

Dr. Hassan Mahmud, President of the Nigerian Association for Energy Economics and former CBN Monetary Policy Director, stressed that Nigeria must convert its abundant natural resources into manufacturing strength, as the UK, US, and China have done historically.

“Our paradox is that economic growth is rising alongside poverty because the services sector dominates output without creating enough jobs,” Mahmud observed.

“Transforming oil, gas, and other resources into industrial capacity is the only way to reverse this trend.”

Speaking earlier the Statistician-General of the Federation, Adeyemi Adeniran, said the data updates were vital for tracking the effectiveness of policies, improving resource allocation, and moving Nigeria toward its goal of becoming a $1 trillion economy by 2030.

However, he acknowledged that the benefits of growth must reach ordinary Nigerians. “Our economy has enlarged, but the impact is not always felt at the grassroots. That is where better data can guide better policies,” he said

CEO Centre for the Study of the Economies of Africa (CSEA), Dr Chukwuka Onyekwena, called for a stronger culture of data literacy in Nigeria, stressing that credible, timely, and widely understood economic statistics are essential for inclusive development and sound policymaking.

The experts agreed that without a deliberate, sustained focus on industrialisation and agriculture, supported by infrastructure, energy reform, and consistent policy, Nigeria risks locking itself into a cycle of low growth, high unemployment, and economic vulnerability.