Nigeria has the potential to emerge as Africa’s leading industrial power, but it must turn its vast natural resources, large consumer market and entrepreneurial strength into productive industries, competitive goods and increased exports.
Dr Kandeh Yumkella, a former Director-General of the United Nations Industrial Development Organisation (UNIDO), made this assertion in Lagos while delivering the sixth Adeola Odutola Lecture, organised by the Manufacturers Association of Nigeria (MAN).
The lecture, themed “Leveraging National Industrial Policy to Position Nigeria as Africa’s Industrial Hub”, examined how Nigeria could use effective industrial policies to strengthen manufacturing and establish itself as a major production centre on the continent.
Yumkella explained that Nigeria already possessed several advantages needed for industrial growth, including a large domestic market, abundant resources, energetic entrepreneurs, financial capacity and a strategic position within the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA).
According to him, the country’s major challenge is not a shortage of ambition or business activity, but its inability to convert these advantages into measurable economic progress.
He stressed that successful industrialisation requires policies that encourage investment, expand productive capacity, promote technological development, improve competitiveness and increase the value of locally produced goods. These measures, he said, would also create employment opportunities.
Despite its considerable potential, Nigeria’s industrial performance remains below expectations. Yumkella noted that manufacturing contributes approximately seven to eight per cent of the country’s Gross Domestic Product (GDP), while manufactured goods account for only about three per cent of total export earnings.
He added that Nigeria’s exports of goods and services represent just 10.7 per cent of GDP, highlighting the need to strengthen domestic production and improve access to international markets.
The former UNIDO chief also pointed to the country’s estimated 41 million micro, small and medium-sized enterprises (MSMEs) as evidence of the strength and resilience of the private sector. However, he cautioned that the existence of numerous businesses does not automatically translate into strong industrial performance.
UNRELIABLE ELECTRICITY REMAINS A MAJOR OBSTACLE
Yumkella identified inadequate and unreliable electricity supply as one of the most significant barriers to industrial development in Nigeria.
He said the national electricity grid supplied approximately 5,000 to 6,000 megawatts, against an estimated demand exceeding 20,000 megawatts.
The power deficit has forced manufacturers to rely heavily on alternative sources of electricity, increasing their operating expenses and weakening their ability to compete with producers in other countries.
According to the figures he presented, manufacturers spent an estimated ₦1.34 trillion on self-generated electricity in 2025, compared with ₦781.68 billion in 2023. Energy costs reportedly account for between 35 and 40 per cent of production expenses.
He urged the Federal Government to make better use of Nigeria’s natural gas reserves, hydropower potential and solar energy resources to provide industries with more reliable and affordable electricity.
Yumkella also advocated the development of regional energy markets across West Africa, noting that improved energy cooperation could support industrial expansion and strengthen the region’s economic competitiveness.
His central message was that Nigeria must move beyond the promise of industrial greatness and implement practical policies that deliver stronger manufacturing output, higher exports, job creation and sustainable economic growth.
