Manufacturing Growth Requires Industrial Strategy Beyond Macro Reforms, CFG Advisory Chief Says

Nigeria's manufacturing sector needs a comprehensive industrial policy framework alongside macroeconomic reforms to attract investment and sustain economic growth, according to CFG Advisory's CEO. Exchange rate liberalisation alone will not unlock the sector's potential without coordinated government support for local producers.

Nigeria's manufacturing renaissance depends on coordinated industrial strategy that goes far beyond exchange rate adjustments and monetary policy tightening, according to Tilewa Adebajo, chief executive officer of CFG Advisory.

Adebajo told CNBC Africa that macroeconomic reforms, including naira liberalisation and central bank tightening, represent merely the foundation for growth. Without complementary industrial policies targeting manufacturing capacity, local production costs, and supply chain resilience, these reforms risk failing to translate into sustained investment and job creation. The CFG Advisory chief emphasized that policymakers must view macro stability as a necessary condition, not a sufficient one, for manufacturing revival.

This assessment carries significant implications for Nigeria's economic trajectory. The manufacturing sector accounts for approximately 9 percent of GDP and employs roughly 1.5 million workers. Weak manufacturing performance has forced businesses to rely heavily on imports, draining foreign exchange reserves and exacerbating naira depreciation pressures. Since 2015, the sector contracted as firms struggled with power deficits, high borrowing costs, and policy uncertainty. Adebajo's remarks suggest that recent CBN actions, including the 800 basis point rate hikes implemented since May 2022, have addressed inflation concerns but remain insufficient without parallel industrial support.

The naira has stabilized at around 1,650 to the dollar in official markets following exchange rate liberalisation in June 2023. However, manufacturers still grapple with volatile input costs and inconsistent access to foreign exchange. A comprehensive industrial strategy would address these bottlenecks through targeted interventions. These might include customs duty adjustments on critical raw materials, preferential credit lines for manufacturing exporters, and infrastructure investment in industrial zones. Without such measures, naira stability alone cannot restore manufacturing competitiveness against cheaper imports.

For Nigerian consumers, a vibrant manufacturing sector directly impacts inflation, employment, and product availability. When local manufacturers cannot compete, consumers face higher prices from imported goods and reduced domestic job opportunities. Youth unemployment in Nigeria exceeded 42 percent in 2023, with manufacturing capable of absorbing significant labor. Adebajo's point underscores why President Bola Tinubu's economic team must move beyond stabilization measures to growth-oriented policies. The administration has articulated an industrial policy agenda but implementation remains scattered across multiple agencies.

CFG Advisory's assessment aligns with broader concerns from business associations. The Manufacturers Association of Nigeria has repeatedly called for integrated policy frameworks addressing power supply, financing, and trade protections. Current arrangements leave manufacturers vulnerable to competition from import-heavy companies that benefit from easier forex access without production obligations. A coordinated strategy would create level playing fields that incentivize domestic production over pure importation.

Looking ahead, the CBN's recent rate hold at 27.25 percent suggests confidence in inflation momentum. Naira stability could enable manufacturers to plan investments with greater certainty. However, without complementary industrial policy, this window may close quickly. Investors considering manufacturing expansion will assess not just macro stability but also sector-specific support frameworks. Nigeria competes globally for manufacturing investment against countries like Vietnam and India that offer comprehensive industrial ecosystems. Adebajo's message to policymakers is clear: stabilization creates opportunity, but strategy creates growth.