Nigeria commits up to 5% of GDP annually to industrial development

Nigeria is setting a new direction for industrial growth, with the Federal Government planning to commit up to five per cent of Gross Domestic Product each year to industrial development financing. The aim is to expand production capacity, strengthen exports and generate jobs across key sectors of the economy.

This approach is outlined in the Nigeria Industrial Plan (NIP), introduced by the Federal Ministry of Industry, Trade and Investment. The plan brings fiscal, monetary, trade, export and industrial policies into a single national framework, replacing fragmented efforts with coordinated execution.

The strategy focuses on making better use of Nigeria’s natural resources and human capital to drive manufacturing-led growth, deepen economic diversification and reduce import dependence.

Financing is a central feature of the plan as Government intends to channel up to five per cent of GDP annually into industrial development. As part of this, the Bank of Industry is to be recapitalised to ₦3 trillion by 2026, while sector-specific intervention funds, many administered through the Central Bank, are expected to expand to improve access to long-term capital. Details on funding sources and structures are still to be clarified.

Manufacturing is projected to contribute 15 per cent of GDP by 2030 and 25 per cent by 2035. The mining sector is expected to reach eight per cent of GDP by 2030 and 10 per cent by 2035. In the near term, policy focus will be on manufacturing, construction, oil and gas, and metals and solid minerals.

The plan recognises that industrial growth depends on more than funding and It emphasises coordination across energy, infrastructure, trade policy, finance, skills development and innovation, alongside close collaboration between government and the private sector to deliver sustainable and inclusive growth.

Aligned with the Nigeria Tax Act 2025, the framework replaces the Pioneer Status Incentive with an Economic Development Incentive, linking tax relief to measurable outcomes such as investment size, production capacity and job creation.

Micro, Small and Medium Enterprises are included through a new Interest Drawback Scheme. Under this model, eligible firms will borrow at commercial rates and receive partial interest refunds after meeting agreed performance targets, including employment or export growth.

Technology and sustainability are also priorities as automation, robotics and digital manufacturing are identified as key to future competitiveness, supported by expanded research and development. The plan targets 25 per cent renewable energy use in the industrial sector by 2030, aligned with Nigeria’s Energy Transition Plan and its net-zero goal for 2060.

Human capital development features prominently, with proposed reforms to Technical and Vocational Education and Training programmes to build a skilled, industry-relevant workforce. Stronger collaboration among academia, public institutions and the private sector is also planned to support innovation.

The timing of the plan aligns with the African Continental Free Trade Area, positioning Nigeria as a net exporter of manufactured goods and a regional supply chain hub. By encouraging local production of critical inputs, including active pharmaceutical ingredients, the plan aims to reduce import dependence and ease foreign exchange pressures.

Backed by a five-year implementation roadmap from 2025 to 2030, the Nigeria Industrial Plan sets out clear objectives, responsibilities and performance measures. In the short term, clearer incentives and improved access to finance are expected to reduce investor uncertainty and unlock stalled projects.

Over the medium term, the framework is expected to support agro-processing, pharmaceuticals and downstream petrochemicals, expand exports, create jobs and contribute to poverty reduction.

With defined targets, structured financing commitments and performance-linked incentives, the plan reflects a shift toward coordinated industrial development, with success to be measured by higher domestic production, increased private investment and sustained export growth.