Nigeria is experiencing a significant decline in manufacturing investments in 2025, a symptom of a broader crisis affecting its industrial and economic fabric. This drop occurs in a context of economic volatility and growing investor distrust, both foreign and domestic.
A Drastic Fall in Foreign Investments
Foreign portfolio investments in the Nigerian market plummeted by 92.39% in April 2025, falling from 349.97 billion naira in March to only 26.64 billion in April. This decline is compounded by a 90.99% decrease in total foreign transactions in the stock market, with net capital outflows reaching 9.79 billion naira for the month. This situation reflects growing investor concerns about macroeconomic uncertainties and global volatility, which hinder renewed interest in Nigeria’s manufacturing sector.
A Marginalized Manufacturing Sector in the National Economy
The Nigerian manufacturing sector accounts for barely 2% of GDP, while the country remains heavily dependent on oil exports (83% of total foreign sales). This oil dependence weakens the economy, making industrial production costly and uncompetitive, especially given insufficient energy infrastructure, which makes manufacturing challenging.
These constraints partly explain recent decisions by major groups like Procter & Gamble, GSK, and Bayer to withdraw from Nigeria, signaling a loss of confidence from international investors in this sector.
Economic Consequences and Outlook
Despite an estimated GDP growth of 3.13% in the first quarter of 2025, an improvement relative to previous years, Nigeria’s economy is hampered by a challenging investment environment and unstable financial markets. The gradual withdrawal of foreign capital from the manufacturing sector exacerbates these difficulties, increasing the country’s economic vulnerability.
The Nigerian government is trying to diversify the economy by reducing its dependence on oil and attracting investments in industry, but structural challenges—including corruption, political instability, and inadequate infrastructure—complicate this transition.
