Foreign Investment in Manufacturing Plunges 54% Despite Capital Importation Surge
Abuja — Foreign investment inflows into Nigeria’s manufacturing sector fell sharply by 54.11 percent in 2025, sparking fresh concerns about the health of industrial growth and investor confidence, even as overall capital importation recorded a significant increase.
Latest investment data indicate that while Nigeria attracted higher total capital inflows across various sectors, the manufacturing segment experienced a pronounced decline, highlighting uneven investment patterns within the economy. Analysts say the development raises questions about structural challenges facing domestic production and industrial expansion.
Economic observers attribute the downturn to a combination of factors, including foreign exchange volatility, rising operating costs, infrastructure constraints, and policy uncertainties that may have dampened investor appetite for long-term industrial commitments. Manufacturing, often viewed as a critical driver of job creation and economic diversification, remains particularly sensitive to such pressures.
Industry stakeholders warn that sustained weakness in foreign investment could slow capacity expansion, technology transfer, and productivity gains within the sector. Some experts argue that the decline contrasts with the government’s broader push to stimulate non-oil growth and strengthen local value chains.
Despite the contraction in manufacturing inflows, Nigeria’s aggregate capital importation figures suggest that investors continued to channel funds into other areas of the economy, such as services, portfolio investments, and select high-growth segments. However, economists caution that a shift away from productive sectors toward shorter-term investments may limit broader economic benefits.
Calls have intensified for targeted reforms to improve the business environment, stabilize macroeconomic conditions, and address infrastructure bottlenecks seen as critical to reviving manufacturing attractiveness. Policymakers have repeatedly emphasized the sector’s strategic importance in achieving sustainable economic development.
The latest figures are expected to fuel policy debates on how to reposition Nigeria’s industrial base and restore investor confidence in manufacturing, widely regarded as a cornerstone of economic resilience and employment generation.
