Nigeria's industry, trade and investment sectors recorded a mixed performance in 2025, as improved macroeconomic stability helped rebuild investor confidence and support business planning, while deep structural costs and long-standing constraints limited the pace of productivity, industrial expansion and private-led growth.
The year marks a sharp contrast with the instability of 2024. A forecast higher exchange rate, easing inflation and calmer financial conditions created a more stable operating environment for businesses and investors, prompting the federal government to emphasize its ambition to reposition the economy for self-reliance, expand non-oil exports, and lead the country toward its goal of becoming a $1 trillion economy by 2030.
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That goal became a major theme shaping policy direction, decision-making, and engagement with global partners, serving as both inspiration and a measure of the scale of reforms needed.
At the center of policy implementation was the Federal Ministry of Industry, Trade and Investment (FMITI), which set ambitious targets for the year, including attracting $6 billion in foreign direct and portfolio investment, generating $6.5 billion in non-oil exports, increasing trade value by 20 percent, and creating 200,000 export-led jobs.
According to the Minister of Industry, Trade and Investment, Jumoke Oduwole, the government intensified investment promotion through targeted road shows and global engagement. He said these efforts have generated investment commitments of over $50 billion, strengthened investor confidence and helped establish Nigeria as a credible, forward-looking investment destination in an increasingly competitive global environment.
Several industrial projects took shape during the year, especially in special economic zones, where new textile parks, automobile assembly plants, and food processing centers emerged.
These facilities were designed to serve the domestic market, conserve foreign exchange, create jobs and support Nigeria's aspiration to become a manufacturing hub for ECOWAS and the wider African market.
Trade diplomacy also featured prominently, with Nigeria completing a World Trade Organization (WTO) trade policy review and pursuing reforms to modernize its trade framework in line with global best practices.
Despite these efforts, the data shows the deep structural weakness of Nigeria's industrial base. Data from the National Bureau of Statistics (NBS) showed that by the third quarter of 2025, manufacturing would account for only 7.62 per cent of real GDP.
Muda Yusuf, chief executive officer of the Center for the Promotion of Private Enterprise (CPPE), said the manufacturing sector remains fragile, expanding by only 1.25 per cent and contributing only 7.62 per cent to the gross domestic product (GDP). He said the weak performance “reflects deep-seated structural constraints, including chronic power shortages, high energy and logistics costs, unfair competition from imports, limited access to finance and high operating expenses.”
Yusuf warned that unless these bottlenecks are decisively addressed, “high power, energy and logistics costs will continue to weigh on real sector productivity and hamper Nigeria's industrial growth prospects.”
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However, he said trade and investment benefited from the relative macroeconomic stability recorded in 2025. According to him, the more predictable environment made it easier for manufacturers and investors to plan, as the exchange rate volatility that characterized 2024 was largely reduced, with a period of mild appreciation during the year.
This stability, he explained, reduced uncertainty, improved investor confidence and contributed to a decline in inflation while supporting consumer purchasing power.
He said that while the anticipated surge in foreign direct investment did not fully materialize, investor sentiment about Nigeria improved during the year, reflecting the time-intensive nature of FDI decisions that require comprehensive country risk assessment.
Portfolio investment flows have performed relatively better and benefited from a more stable macroeconomic environment, he said. However, persistent challenges are weighing on trade performance, particularly high logistics costs driven by port inefficiencies and insecurities, which have disrupted mobility and distribution networks.
Yusuf cited cost of funds as a major concern for investors. “Despite the decline in inflation, we have not seen any significant decline in interest rates. This, again, is something that investors in the business and investment environment are concerned about in 2025,” he said.
Looking ahead, he expressed cautious optimism for 2026, predicting that continued stability could support a softening of interest rates and a decline in energy costs, especially if global oil prices remain relatively low. “We're hoping that some of these changes will be for the better if we have a level of stability in 2026,” he said. “We also expect to see some reduction in energy costs due to the fact that oil prices are not that high and they are not expected to be that high in the coming year… But in general, I think 2025 was a much better year for business and investment than last year. We expect 2026 to be an even better year.”
On the trade front, Nigeria deepened international partnerships with the signing of the UK Enhanced Trade and Investment Partnership, progress on Comprehensive Economic Partnership agreements with the UAE and Japan, the US Commercial Investment Partnership, expanded engagement with Brazil and the signing of a formal Nigeria-Benin Memorandum of Understanding.
African Continental Free Trade Area (AfCFT) implementation emerged as one of the most consequential developments of the year, as Nigeria completed its five-year implementation review ahead of peers, secured Presidential approval and transmitted its ECOWAS Provisional Tariff Schedule to the AfCFT Secretariat.
As a co-champion of digital trade under the AfCFTA, Nigeria also pursued reforms to unlock cross-border digital commerce and reduce trade barriers.
Gender inclusion also featured strongly in 2025. The Ministry of Industry, Trade and Investment, working with the United Nations Development Program and Uganda Airlines, launched the Nigeria-East and Southern Africa Air Cargo Corridor under the AfCFTA framework to export made-in-Nigeria goods exclusively produced by women-led businesses, with up to 75 percent discount on logistics costs.
Nigerian women-led firms also secured export opportunities worth $32 million through the Shetrades Nigeria-UK Trade Mission supported by the UK Government.
Nevertheless, concerns grew within the private sector about the role of the state in business activity.
Dele Kelvin Oye, president of the Alliance for Economic Research and Ethics and president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), cautioned against excessive government involvement.
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He said, “Doing business of government is not a business. When countries sign MOUs elsewhere, it is businesses that come to the table. In Nigeria, it is mostly government officials. Many of these commitments are announced, and that is the end.”
Oye argued that decades of state-led enterprises reflected systemic failure rather than prosperity, citing Ajaokuta Steel, ALSCON, Nigerian Airways and national refineries. He said, “These failures are not isolated incidents. They are the inevitable consequences of a model where government oversteps its legitimate role.”
He called for decisive reforms, including halting the creation of new state-owned enterprises, accelerating privatization, simplifying regulation, and prioritizing infrastructure investment through public-private partnerships.
According to him, “The choice is between continuing failure through mechanisms of legal plunder or facilitating a new era of prosperity driven by private sector innovation and leadership. For Nigeria's future, the choice must be clear.”
