Nigerian manufacturers committed a record ₦4.54 trillion in nominal investment to the economy in 2025, a 59% rise from the ₦2.85 trillion recorded in 2024, according to data released by the Manufacturers Association of Nigeria (MAN).
The sharp increase signals continued capital spending on plants, machinery and expansion even amid tough operating conditions. At the same time, the same dataset highlights a stubborn demand problem: finished goods valued at approximately N2.12 trillion remained unsold during the year.
Breakdown of the investment figures
Investment in plants and machinery made up more than half of the total, reaching ₦2.47 trillion. The food, beverage and tobacco sector led with ₦1.30 trillion, followed by non-metallic mineral products at ₦960.44 billion.
These nominal numbers, however, need careful interpretation. When adjusted for inflation, real investment by manufacturers stood at only ₦1.33 trillion in 2025. Real spending on plants and machinery rose by a modest 3.1% to ₦349.17 billion.
In simple terms, nominal investment reflects the actual naira amounts spent at the prices prevailing in 2025. Real investment removes the effect of inflation and gives a clearer view of the actual volume of new productive capacity added. The large gap between the two figures shows that much of the headline growth was driven by higher prices rather than a major increase in physical investment.
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The inventory challenge
The ₦2.12 trillion in unsold finished goods points to significant inventory pressure across the sector. Although this figure is marginally lower than the ₦2.14 trillion recorded in 2024, it remains elevated.
The food, beverage and tobacco sector alone accounted for more than 35% of the total inventory, valued at ₦755.8 billion.
Economist and consultant Nonso Iheoma has noted that the buildup of unsold stock suggests manufacturers are producing goods that many consumers can no longer afford at current prices. This ties up capital in inventory, raises storage and financing costs, and increases dependence on short-term credit.
Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria, attributed the high inventory levels largely to a squeeze on Nigeria’s middle class and persistently weak purchasing power.
What the data means for the wider economy
The combination of rising nominal investment and stubbornly high inventories reveals a structural tension. Manufacturers are still willing (or compelled) to invest in capacity, yet domestic demand is not absorbing the output at the same pace.
Weak consumer purchasing power remains the central constraint. High inflation in previous years has eroded real incomes, while a large share of household spending continues to go toward essentials such as food, energy and transport. When disposable income is limited, demand for many manufactured goods softens, leading to stockpiles.
For manufacturers this creates a difficult cycle: capital locked in unsold goods reduces cash flow, raises working-capital needs, and can discourage further expansion even when nominal investment numbers look strong. For the broader economy it signals that industrial growth will remain constrained until household incomes and purchasing power improve.
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Looking ahead
The 2025 figures show resilience on the investment side but underline that production alone is not enough. Clearing inventories sustainably will likely require a combination of improved macroeconomic stability, stronger real incomes, better access to affordable credit, and continued efforts to boost demand for locally made goods.
MAN’s data provides a useful snapshot of both progress and remaining challenges in Nigeria’s manufacturing sector. Tracking real (inflation-adjusted) investment and inventory trends in the coming quarters will be more informative than focusing solely on the large nominal investment headline.
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