Nigeria Industry

While a large number of free zones have been established in Nigeria since the 1990s, offering a host of encouraging regulatory and fiscal incentives and bringing in billions in direct investment, many of them have yet to reach their full potential, with operators continuing to face some broader challenges, including infrastructural bottlenecks.

With two new cement plants coming online within the past few months, Nigeria’s cement production capacity has increased substantially. This expansion should mean the domestic production will not only be able to meet the demands of the local market – which has been subject to significant price volatility in recent years – but also export to regional economies.

While agriculture accounts for about 40% of its national GDP, Nigeria currently produces only a small portion of the fertiliser consumed by its farmers. However, a radical change is in sight, with the recent announcement that two new fertiliser production facilities will come on-line within the next few years.

While manufacturers in Nigeria have long had to grapple with constraining operating conditions, such as an intermittent power supply, cement producers have managed to establish an enviable track record. In eight years, the country has built up a domestic production industry capable of meeting two-thirds of local demand for cement. With further capacity expansion slated for this year, Nigeria is on track to achieve self-sufficiency in cement production and could even become a regional exporter.

While Nigeria’s pharmaceutical industry currently faces a range of challenges, including high import levels and a counterfeit drug trade, efforts by the government and the National Agency for Food and Drug Administration and Control (NAFDAC) to improve regulation should help local manufacturers.

Nigeria’s once vibrant textile industry has all but disappeared in recent years under competition from cheaper foreign goods. However, strengthening the real sector of the economy is a central component of the government’s plan to diversify away from hydrocarbons. A large-scale funding programme is in the works to bail out textile companies and promote the manufacturing sector as a whole.