Nigeria’s ambition to build an export-led economy is being held back less by a lack of investment than by an inability to fully utilise existing factories, finance the companies capable of scaling, and tackle structural costs that continue to erode competitiveness, according to top industry leaders.
Executives from manufacturing, development finance, private security and philanthropy, speaking at the BusinessDay CEO Forum in Lagos, argued that Nigeria’s next phase of industrial growth will depend more on fixing long-standing bottlenecks than launching new industrial projects.
Their message comes as the federal government pushes to diversify exports, deepen local manufacturing and reduce dependence on oil revenues. Yet manufacturers continue to battle high energy costs, limited access to long-term financing, infrastructure gaps and rising operating expenses that have left much of the country’s industrial capacity underutilised.
Half of Nigeria’s factories are sitting idle
One of the strongest signals came from Aderemi Saka, managing director of NASCON Allied Industries, who disclosed that Nigerian manufacturers are operating at only 50 to 60 percent capacity utilisation.
The implication, industry experts say, is that Nigeria already possesses significant productive assets capable of supporting industrial expansion, but those assets are unable to reach full output because of structural constraints.
“We don’t necessarily need another wave of factories before fixing the ones we already have,” Saka said during the panel discussion.
Her comments suggest that increasing utilisation of existing plants could deliver faster economic gains than building entirely new industrial facilities, especially as investors remain cautious amid elevated production costs.
The remarks reinforce concerns that billions of naira invested in manufacturing infrastructure continue to generate below-potential returns because companies cannot operate efficiently.
Nigeria’s missing middle is starving industry of growth capital
While manufacturers struggle to maximise existing assets, the country’s development finance institution believes financing remains one of the biggest obstacles preventing businesses from scaling.
Olasupo Olusi, managing director of the Bank of Industry (BOI), said Nigeria’s financing ecosystem leaves medium-sized manufacturers caught between commercial banks that prefer established corporates and intervention programmes largely designed for micro enterprises.
According to Olusi, these companies represent Nigeria’s strongest opportunity to build globally competitive manufacturers but remain underserved by existing financial structures.
Rather than simply providing loans, BOI is increasingly helping businesses strengthen governance, institutionalise operations, attract strategic investors and improve corporate structures so they can access long-term capital.
The strategy reflects a growing recognition that financing alone cannot solve Nigeria’s industrialisation challenge if businesses are not structured to absorb growth capital.
His comments align with broader concerns that Nigeria’s industrial sector needs patient, affordable financing that matches production cycles rather than expensive short-term credit.
Energy and internal losses are quietly eroding competitiveness
Beyond financing, executives identified operating costs as another major constraint to industrial growth.
Saka said energy alone accounts for between 30 and 40 percent of manufacturers’ production costs, making electricity one of the single biggest factors determining whether Nigerian products can compete locally or internationally.
While large industrial groups such as Dangote have invested in captive power infrastructure to reduce dependence on the national grid, she acknowledged that such investments remain beyond the reach of most manufacturers.
Olajide Martins, managing director of Bemil Security Services, argued that internal theft has become a more significant source of financial losses than external criminal activity for many businesses.
Rather than focusing solely on physical security, Martins proposed closer collaboration between government and industry to measure sector-wide losses and establish a shared intelligence platform that would allow businesses to identify recurring patterns and improve internal controls.
The comments suggest that improving competitiveness requires addressing hidden operational leakages as much as headline infrastructure deficits.
Human capital seen as Nigeria’s long-term competitive advantage
Although financing, infrastructure and production dominated much of the discussion, panellists agreed that long-term industrial competitiveness ultimately depends on the quality of Nigeria’s workforce.
Martins argued that empowering employees to make decisions improves productivity and customer outcomes, while governance systems become effective only when supported by capable people.
Udon Udoh, chief executive officer of ASR Africa Initiative, said investments in education, digital skills and renewable energy should be viewed as economic investments rather than social spending.
He noted that approximately 37 percent of children aged between three and five years drop out before completing early childhood education, warning that today’s education gaps will determine the quality of Nigeria’s workforce over the next decade.
ASR Africa currently commits about $100 million annually to health, education and social development across Africa, with roughly half invested in Nigeria.
Udoh said strengthening early education, expanding digital literacy and improving access to energy would ultimately produce a more productive workforce capable of driving industrial growth.