Ukamaka Onyejemuo wrote. You cannot compete with entrepreneurs who can borrow at around 3% when you are borrowing at over 30%.
You cannot compete with manufacturers operating inside an industrial system with more than 4 MILLION MW of installed electricity-generation capacity when your national grid is producing roughly 4,000/4,300 MW.
And then we sit in Nigeria and casually ask:
“Why don’t Igbo traders at Trade Fair, Alaba, Aba and Onitsha just start manufacturing instead of being middlemen?”
It sounds intelligent until you examine the economics.
According to the People’s Bank of China, the average interest rate on newly issued loans to Chinese manufacturing enterprises was just 2.74% in 2026.
Now compare that with Nigeria.
Data from the Manufacturers Association of Nigeria (MAN) shows that Nigerian manufacturers paid an average interest rate of 32.1% in 2025, after averaging 35.6% in 2024.
Think about what that means.
A Chinese manufacturer can borrow the equivalent of ₦1 billion at around 3%, invest in machinery, automate production, increase output and spread fixed costs across millions of units.
His Nigerian competitor borrowing at over 30% starts the race carrying a refrigerator on his back.
And financing is only the beginning.
By May 2026, China had approximately 4.01 million MW of installed electricity-generation capacity.
Nigeria had about 13,625 MW of installed grid-connected capacity in April 2026, but only about 4,286 MW was available for dispatch. In February 2026, national generation was around 4,300 MW.
So the Nigerian manufacturer buys generators.
Buys diesel.
Buys transformers.
Installs solar panels, batteries and inverters.
Maintains all of them.
Pays for security.
Deals with bad roads and expensive logistics.
Deals with FX volatility when importing machinery, spare parts and raw materials.
Borrows money at 30%+.
Then he is expected to manufacture a charger, power bank, textile, shoe, pharmaceutical product or household appliance cheaply enough to compete with a Chinese manufacturer operating inside the world’s largest industrial ecosystem.
This is why saying “just manufacture” is intellectually lazy.
Manufacturing is not simply buying a machine and opening a factory.
Manufacturing depends on an ecosystem of cheap capital, reliable electricity, transport infrastructure, industrial clusters, local supply chains, efficient ports, technology, skilled labour, stable FX and predictable government policy.
China spent decades constructing that ecosystem.
Nigeria largely asks individual entrepreneurs to personally compensate for the absence of one.
According to the Manufacturers Association of Nigeria, 767 manufacturing companies shut down in 2023 alone, while another 335 became distressed.
The Financial Times subsequently cited MAN data indicating that roughly 800 manufacturers closed in 2023.
Think about that.
This is not merely a theoretical discussion about whether Nigerians should manufacture more. Existing manufacturers are already struggling to survive.
Several major multinational companies have also changed their Nigerian manufacturing or commercial operations in recent years.
KimberlyClark is one of the clearest examples.
The company had previously stopped Nigerian operations in 2019, subsequently returned and invested approximately $100 million in a manufacturing facility, but announced another exit from Nigeria in 2024 and closed its Lagos manufacturing operation.
GSK Consumer Nigeria announced in 2023 that it would discontinue its previous Nigerian commercialisation model and move toward distribution through third parties.
Procter & Gamble moved away from local manufacturing in Nigeria toward an import-based model.
Unilever Nigeria discontinued production in certain categories, including home care and skin cleansing, as part of restructuring, although Unilever itself did not completely leave Nigeria.
Sanofi also changed its Nigerian operating model toward third-party distribution rather than simply disappearing from the Nigerian market.
And this distinction matters.
It would be inaccurate to simply say that GSK, P&G, Unilever and Sanofi all “left Nigeria.”
Africa Check examined widely circulated lists claiming that dozens of multinational companies had completely exited Nigeria and found that several of those claims exaggerated what actually happened.
Some companies ceased local manufacturing.
Some moved to third-party distribution or import models.
Some restructured particular product categories.
Others genuinely shut facilities or withdrew operations.
But economically, there is still an important question underneath those distinctions
Why would companies with enormous international balance sheets decide that manufacturing certain products locally is no longer attractive?
If multinational corporations with access to global capital, technology, management expertise and international supply chains struggle with the Nigerian manufacturing environment, imagine the hurdle facing a trader in Trade Fair who wants to move from importing chargers to manufacturing them locally.
KimberlyClark is particularly instructive.
A multinational can invest approximately $100 million in Nigerian manufacturing capacity and still subsequently conclude that continuing local operations does not make economic sense.
That should tell us something about the environment.
And behind the multinational headlines are hundreds of smaller Nigerian manufacturers whose closures will never become national news.
So when a trader in Alaba, Onitsha, Aba or Trade Fair decides that importing and distributing Chinese products gives him a better risk-adjusted return than putting billions of naira into a Nigerian factory, that decision should not automatically be interpreted as lack of ambition.
Look at the incentive structure.
If manufacturing gives you 30%+ borrowing costs, unreliable electricity, FX exposure, expensive logistics and infrastructure you largely have to provide yourself, while importing allows you to purchase from a Chinese supplier benefiting from approximately 3% manufacturing credit and enormous industrial infrastructure, capital will naturally move toward the less destructive option.
That is basic economics.
The serious question is therefore not:
“Why aren’t Igbo traders manufacturing?”
The serious question is:
“What has Nigeria built that would allow an indigenous manufacturer to compete with China?”
If Nigeria wants its traders to become industrialists, Nigeria must build an economy in which industrialisation makes economic sense.
Give manufacturers access to cheap, long term productive credit.
Fix electricity.
Build functioning industrial parks.
Improve railways, roads and ports.
Create predictable economic policy.
Reduce the cost of importing productive machinery.
Develop domestic steel, petrochemical and component supply chains.
Invest seriously in technical education.
Maintain a stable enough macroeconomic environment for a manufacturer to plan five or ten years ahead.
Entrepreneurs respond to incentives.
You cannot create Chinese-scale manufacturing competitiveness by lecturing Nigerian traders about manufacturing while giving them Nigerian electricity, Nigerian infrastructure, Nigerian logistics and Nigerian interest rates, then asking them to compete against Chinese factories benefiting from Chinese financing and Chinese industrial infrastructure.
Before asking the trader why he has not built a factory, ask why the country has made building that factory such an expensive gamble.
…
Dear Readers, Good and credible news reportage is tedious task and requires huge finances.
We are soliciting your Noble support for as low as N1,000 your support would go a long way in assisting us to continue to guarantee our readers quality news.
Bank transfers can be made to:
Account Name: Harvest and Commercial
Bank: Sterling Bank
Account Number: 0078627735