Manufacturing output doubles while its share of GDP falls in Q1 2026

*Weak manufacturing base threatens economic gains – CPPE

By Yinka Kolawole

Nigeria’s manufacturing sector posted a notable rise in output during the first quarter of 2026 (Q1’26), with growth more than doubling the previous year’s rate. Yet the sector’s share of the nation’s Gross Domestic Product (GDP) slipped slightly, raising concerns that a fragile industrial base could hinder long‑term economic transformation.

NBS data show manufacturing expanded by 3.29 per cent year‑on‑year in Q1’26, up from 1.69 per cent in the same period of 2025 (Q1’25).

This marks the strongest quarterly growth since Q1 2022, when the sector grew 5.89 per cent, and represents a rebound from Q4’25, when growth was 1.12 per cent.

Despite the higher output, manufacturing’s contribution to real GDP fell marginally to 9.57 per cent in Q1’26 from 9.62 per cent in Q1’25, underscoring the sector’s structural challenges.

MAN, the Manufacturers Association of Nigeria, had projected a 3.1 per cent growth rate for 2026 and expected the sector’s real‑GDP contribution to rise to 10.2 per cent.

“Real manufacturing growth is projected to reach 3.1 per cent, while contribution to real GDP is expected to rise to 10.2 per cent,” MAN said in its 2026 outlook.

While Q1 growth slightly outpaced the association’s annual forecast, the sector’s GDP share remained below expectations.

NBS reported that real GDP growth in manufacturing was higher than the same quarter of 2025 and exceeded the preceding quarter by 1.60 and 2.17 percentage points, respectively.

The report also showed manufacturing contributed 10.08 per cent to nominal GDP in Q1’26, down from 10.78 per cent in Q1’25 but up from 8.34 per cent in Q4’25. Nominal GDP growth in the sector rose to 10.22 per cent year‑on‑year, compared with 5.80 per cent in the preceding quarter.

Analysts attribute the improvement to increased activity in consumer goods production, food processing, industrial materials, cement manufacturing and other construction‑related industries.

Notably, the cement sector grew 11.53 per cent during the period, more than double the 4.94 per cent achieved in Q1’25 and well above the 4.12 per cent growth posted in Q4’25.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), warned that Nigeria’s economy may struggle to achieve sustainable transformation without a stronger manufacturing base.

In a policy brief on the Q1’26 GDP report, Yusuf identified the weak contribution of manufacturing to GDP and the contraction in electricity supply as key structural concerns.

He said manufacturing’s GDP share remains below 10 per cent, reflecting persistent challenges such as high energy costs, elevated interest rates, poor infrastructure, logistics bottlenecks and policy uncertainties.

“The economy cannot achieve durable structural transformation without a stronger manufacturing base. Industrialisation remains the most sustainable pathway to large‑scale job creation, export competitiveness and inclusive growth,” Yusuf stated.

He urged policymakers to intensify efforts to address the constraints facing manufacturers, stressing that sustained industrial growth remains critical to broadening Nigeria’s economic base, creating jobs and strengthening long‑term economic resilience.

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