Nigeria’s ambition to expand its manufacturing exports is being undermined by high production and operating costs, weak logistics infrastructure and other competitiveness constraints, the Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has said.

Ajayi-Kadir, who spoke at the ninth Annual General Meeting of the Manufacturers Association of Nigeria Export Group (MANEG) in Lagos yesterday, said the country’s manufacturing export performance remained constrained by the high cost of energy, finance, transportation, taxes and other operating expenses.

He said the costs were making Nigerian manufactured products more expensive and less competitive in international markets, warning that greater attention must be paid to the cost structure confronting manufacturers if the country is to expand its non-oil exports.

Ajayi-Kadir said logistics had also become a major constraint to manufacturing exports, with poor road infrastructure, high transportation costs, port congestion and other trade-related bottlenecks increasing the time and cost of moving goods from factories to international markets.

He said the challenges had weakened the ability of Nigerian manufacturers to compete with countries operating more efficient logistics systems, despite the opportunities created by the African Continental Free Trade Area (AfCFTA).

Speaking on the theme of the AGM, export trade and logistics expert, Barrister Kolawole Awe, said the scale of the problem was reflected in Nigeria’s poor global competitiveness ranking.

Awe said Nigeria ranked 68th out of 70 economies in the 2026 global competitiveness ranking he cited, while its position on the 2026 Logistics Performance Index stood at 88th.

He said the figures showed the extent to which high costs and infrastructure deficiencies were weighing on Nigerian manufacturers seeking to compete beyond the domestic market.

“Logistics cost is about 26 to 30 per cent of the FOB value. Now, add that figure to these figures, then you can imagine how stormy it is for manufacturers in Nigeria to export,” Awe said.

According to him, Nigeria’s infrastructure deficiency stood at about 35 per cent, while interest rates remained high despite the recent reduction in the monetary policy rate (MPR).

He said the cost of funds could rise to between 31 and 32 per cent for manufacturers after banks added their margins to the prevailing monetary policy rate, making it difficult for Nigerian businesses to compete with producers in countries where infrastructure, interest rates and inflation were lower.

Awe also highlighted the poor state of roads and limited use of rail for freight movement, saying less than 40 per cent of roads in Nigeria were tarred, while the country had less than 5,000 kilometres of railway compared with about 30,000 kilometres in South Africa.

He said only about 10,000 containers were moved by rail in 2025 out of more than 2.1 million containers moved, despite the potential of rail to cut transportation costs significantly.

“Rail is 50 per cent cheaper than road. Rail is 60 per cent cheaper than road,” Awe said, adding that greater use of rail, particularly through inland container depots, could substantially reduce the cost of moving goods.

He also identified delays at the ports as another major burden on manufacturers and exporters, saying cargo could remain in Nigerian ports for between one and two months.

Awe said the limitations at the Apapa and Tin Can ports had made expansion difficult, while the performance of Lekki Port showed that exporters and importers were seeking alternatives where they could move goods more efficiently.

Beyond infrastructure, he said informal exports and the grey market were also undermining formal manufacturers who invest heavily in production, market development and regulatory compliance.

The Chairman of MANEG, Ruth Owojaiye, said manufacturers continued to face a difficult operating environment despite signs of improved macroeconomic stability.

She said high inflation, high interest rates, rising energy and logistics costs, inadequate power supply and insecurity had continued to push up production costs and constrain business operations.