Rebased GDP 18.3% nominal growth hasn’t translated to economic progress–MAN

 

Maureen Aguta

 

The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has cautioned against interpreting the revised nominal Gross Domestic Product (GDP)estimate as evidence of significant economic progress.

Despite the 18.3 per cent year-on-year increase, Ajayi-Kadir noted that real GDP growth remains weak, averaging just 1.95 per cent between 2020 and 2024.

“We must not be fooled by the nominal GDP growth. The real GDP growth tells a different story. The sluggish growth shows the underlying fragility of Nigeria’s productive base and the capacity of the economy to deliver sustainable and inclusive development”.

Ajayi-Kadir commended the National Bureau of Statistics (NBS) for the rigorous technical work that led to the rebasing of Nigeria’s Gross Domestic Product (GDP).

However, he expressed concerns over the declining role of the industrial sector, particularly manufacturing.

“Industry’s share of GDP fell from 27.65 per cent in the 2010 base year to 21.08 per cent under the 2019 rebased structure, marking a structural shift away from production toward low-productivity service activities. Manufacturing is structurally weak, with sub-sectors that should be growth drivers performing below potential,” he said.

According to Ajayi-Kadir, the rebasing exercise reveals a more diversified economy, but it also exposes the underperformance of industry. “The average annual growth rate of the manufacturing sector between 2019 and 2024 is negative (-0.76 per cent). This means Nigeria’s manufacturing sector has been shrinking in real terms over the last five years.”

Ajayi-Kadir attributed the current size of Nigeria’s GDP to several factors, including broader sectoral coverage, improvements in data quality, and sectoral growth differentials.

“The expansion in GDP is largely due to the inclusion of previously underreported and excluded sub-sectors such as the digital economy, modular refineries, entertainment and creative industries, water transport, and pension administration.”

He also noted that the services sector, particularly telecommunications, trade, real estate, and creative industries, grew rapidly in 2024, while agriculture’s share rose to 27.8 per cent. However, the industrial sector, particularly manufacturing, continues to underperform.

“The rebasing of GDP has revealed worrisomely that Nigeria is not industrialising yet, and that its economic expansion is not backed by productive transformation. We urge the government to prioritise manufacturing in policy, financing, and infrastructure development, because without a strong industrial base, GDP expansion may just become a hollow statistic,” Ajayi-Kadir said.

He called on the government to treat the rebased GDP not as a celebration of growth, but as a strident call for structural industrial reforms. “Nigeria must re-industrialise to achieve inclusive growth, build export capacity, and reduce dependence on primary commodities and informal activities.”

Ajayi-Kadir emphasised that a strong industrial base is crucial for sustainable economic development.

“Without a strong industrial base, we will continue to struggle with economic instability, unemployment, and poverty. The government must take bold steps to promote manufacturing and industrialisation,” he said.