Continuous decline in manufacturing investment worrisome — LCCI

By Yinka Kolawole 

The Lagos Chamber of Commerce and Industry (LCCI) has lamented the continuous declining investment in Nigeria’s manufacturing sector, noting that it reflects investors’ apprehension in making long-term commitments to the country’s real sector.

Director General of LCCI, Dr Chinyere Almona, in a statement yesterday, while commenting on the latest data from the National Bureau of Statistics (NBS) on inflation and capital importation.

She said though the headline inflation eased for the fourth consecutive month and capital inflows rose significantly in the first quarter of the year (Q1’25), the details reveal persisting structural weaknesses that continue to weigh on the economy.

Her words: “Though inflation is moderating annually, food inflation remains elevated at 22.74 per cent year-on-year, with rural communities experiencing sharper monthly increases than urban centres. This persistent rise in food costs underscores the urgent need for targeted interventions in agriculture, rural infrastructure, and logistics efficiency to ease supply-side bottlenecks.

“We need policy interventions that support more productive economic activities, create sufficient supply, make goods available at the right places, create jobs, and let businesses thrive in an enabling business environment. The interventions should deal with energy cost, power supply, logistics, infrastructure deficits, business process bottlenecks around licensing and registration, access to credit, and foreign exchange (forex) liquidity through non-oil exports.

“Nigeria attracted $5.64 billion in Q1 2025, representing a 67% year-on-year increase and 11% growth quarter-on-quarter. While this surge signals renewed investor interest, the structure of inflows raises concern. Over 90 per cent of total inflows were in portfolio investments, short-term funds chasing high yields in government securities.

“By contrast, Foreign Direct Investment (FDI) plunged to $126.29 million, down 70 per cent from the previous quarter, accounting for just 2.24 per cent of total inflows.

“This imbalance reveals that investors remain cautious about making long-term commitments to Nigeria’s real sector.

“Particularly worrying is the continued decline in investment into manufacturing, which attracted only $129.92 million in Q1 2025, a 32 per cent drop from the same period in 2024.”

LCCI therefore called for urgent measures to strengthen incentives for FDI, including stable tax and regulatory frameworks that reduce perceived risk; and rebuild domestic investor confidence, as local capital commitments often precede foreign inflows.

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