Nigeria's manufacturing sector has shown growth, with real manufacturing GDP expanding by 3.24 percent year-on-year in the second quarter of 2026. However, the sector's contribution to real GDP fell to 7.72 percent from 7.81 percent a year earlier. Despite this growth, the country's dependence on imported manufactured goods remains high. The National Bureau of Statistics reported that Nigeria imported manufactured goods worth N9.51 trillion in Q2 2026, up 20.65 percent from N7.88 trillion in Q2 2025.
The country's broader trade position has improved, with Nigeria recording a N12.60 trillion merchandise trade surplus in the second quarter of 2026. This is more than double the N6.25 trillion recorded in the same period of 2025. However, this improvement is largely due to stronger exports of crude oil and other petroleum products, rather than a structural shift towards manufactured exports. Manufactured goods remained the dominant category of imports, with a significant increase in the first half of the year.
The value of manufactured goods imported in Q2 2026 was more than 24 times the value exported. Manufactured-goods exports stood at just N393.03 billion during the quarter, although that represented a 29.87 percent improvement from N302.64 billion in Q1 2026. However, exports were down 51.10 percent from N803.81 billion in Q2 2025. This creates a substantial imbalance between imports and exports.
The composition of manufacturing growth also matters, with some of the strongest growth coming from capital-intensive activities. Oil refining expanded by 43.94 percent in real terms, while cement grew by 12.75 percent and chemical and pharmaceutical products by 7.70 percent. Food, beverages and tobacco, one of the largest manufacturing groups, grew by 2.79 percent. However, textile, apparel and footwear contracted by 1.23 percent in real terms for a sixth consecutive quarter.
The uneven performance of the manufacturing sector suggests that growth is not broad enough across consumer and labour-intensive industries to indicate a widespread replacement of imported products. Import substitution requires domestic producers to capture demand that is currently being met by foreign suppliers. The latest trade figures show that this transition remains incomplete, with Nigeria still relying heavily on imported manufactured goods.
Some imports are clearly productive, such as machinery, industrial equipment, specialised components, chemicals, and other inputs that domestic manufacturers cannot yet produce competitively or in sufficient quantities. However, the import bill also contains substantial demand for finished manufactured products, including used vehicles, motorcycles, and other manufactured products. This raises concerns about the country's ability to reduce its dependence on imports.
Nigeria's exchange-rate adjustment has also not eliminated its dependence on imported manufactured goods. A weaker naira raises the local-currency cost of imports, but higher import prices do not automatically create local substitutes. The manufacturing data reinforce this point, with real manufacturing growth improving to 3.24 percent in Q2 2026, but the sector's share of real GDP declining.
Key points
- Nigeria's manufacturing growth is not translating into reduced dependence on imported manufactured goods.
- The country's trade position has improved, but largely due to stronger exports of crude oil and other petroleum products.
- Import substitution requires domestic producers to capture demand currently met by foreign suppliers, a transition that remains incomplete.
