By Springnewsng Media Limited | March 24, 2025

Nigeria’s manufacturing sector is grappling with the severe economic challenges triggered by government policies, as recent financial reports reveal a staggering 90.6% rise in the cost of sales among major manufacturers in 2024.http://manufacturers in 2024.

Rising Costs and Economic Pressures

The cost of sales—which includes expenses on raw materials, logistics, energy, and other manufacturinghttp://The cost of sales—which includes expenses on raw materials, logistics, energy, and other manufacturing inputs—has surged due to high inflation, foreign exchange volatility, and escalating production costs. Analysts suggest that despite some stability in key macroeconomic indicators, manufacturers are yet to feel significant relief.

A Financial Vanguard report shows that despite attempts at cost-cutting and backward integration, many firms remain vulnerable to financial and economic pressures. The total cost of raw material imports by 12 leading consumer goods companies increased by 88% year-on-year (YoY) in 2024, highlighting their dependence on costly imports due to an unstable exchange rate.

Key Industry Figures

According to the report, the combined cost of sales for these 12 manufacturers jumped from N2.1 trillion in 2023 to N3.91 trillion in 2024, with major players recording substantial increases:

• Nestlé Nigeria: +97.7% to N652.5 billion
• Cadbury Nigeria: +77.2% to N111.7 billion
• Unilever Nigeria: +30.6% to N94.03 billion
• Nigerian Breweries: +97.5% to N764.5 billion
• BUA Foods: +110% to N985 billion

Despite these soaring costs, bank borrowing among the firms declined by 6.4%, from N1.9 trillion in 2023 to N1.7 trillion in 2024, as companies sought to reduce their reliance on loans amidst high interest rates. However, loss before tax (LBT) still spiked by 76.6%, reaching N407.4 billion in 2024 from N230.7 billion the previous year.

Executives Stay Optimistic

Despite the financial strain, industry leaders maintain a positive outlook.

• Nestlé Nigeria’s MD, Wassim Elhusseini, emphasized the company’s resilience, stating, “Our Q4 2024 results mark a return to profitability with a net profit of N19.7 billion, compared to a N36.4 billion loss in Q4 2023.”
• Nigerian Breweries CEO, Hans Essaadi, credited revenue growth to “strategic pricing, market expansion, and operational efficiencies.”
• BUA Foods MD, Dr. Ayodele Abioye, highlighted the company’s adaptability, stating, “Despite economic hurdles, we have successfully expanded capacity and enhanced internal efficiencies.”
• Unilever Nigeria MD, Tobi Adeniyi, reinforced the company’s commitment to “operational efficiency and market share growth.”

Analysts Warn of Policy Constraints

While executives express optimism, analysts remain skeptical about Nigeria’s business environment. They argue that government policies continue to stifle industrial growth, making it harder for manufacturers to thrive.

With 2025 projections showing a potential economic rebound, industry stakeholders are hopeful—but cautiously so—as they navigate an uncertain landscape.