Public Debt, Macroeconomic Conditions, and Manufacturing Performance in Nigeria: Implications for Industrial Infrastructure Financing, 2015–2024

Abstract

Nigeria’s persistent dependence on public borrowing has renewed debates on the relationship between sovereign debt, industrial development, and macroeconomic stability. Despite the rapid growth of Nigeria’s public debt stock—from approximately ₦12.6 trillion in 2015 to ₦144.67 trillion in 2024—the manufacturing sector has continued to experience structural challenges, including inadequate infrastructure, exchange-rate instability, inflationary pressures, and weak productive capacity. This study examines the implications of sovereign debt accumulation for manufacturing performance in Nigeria. It evaluates the potential of Special Economic Zones (SEZs), industrial clusters, and sovereign Sukuk financing as alternative mechanisms for supporting industrial development. The study adopts an integrated descriptive macroeconomic and qualitative policy-review design, combining descriptive analysis of macroeconomic data with a synthesis of the policy literature. Secondary data were obtained from the Debt Management Office, the Central Bank of Nigeria, the National Bureau of Statistics, the Manufacturers Association of Nigeria, and peer-reviewed studies published between 2020 and 2026 to contextualise empirical debt and manufacturing data covering 2015–2024. The analysis employs descriptive trend analysis, comparative policy analysis, and thematic synthesis to assess trends in public debt, manufacturing output, exchange-rate movements, inflation, and infrastructure financing. The findings reveal a notable manufacturing paradox within Nigeria’s macro-industrial ecosystem. Although sovereign borrowing expanded significantly over the study period, manufacturing performance remained relatively low. Manufacturing’s contribution to gross domestic product fluctuated within a narrow range, while capacity utilisation remained vulnerable to macroeconomic shocks. Furthermore, exchange-rate depreciation and inflation increased production costs and weakened industrial competitiveness, while rising debt-service obligations constrained government investment in productive infrastructure. The study argues that the developmental impact of sovereign debt depends less on the volume of borrowing than on the efficiency and composition of debt allocation. It concludes that asset-backed financing instruments, particularly sovereign Sukuk bonds, alongside well-coordinated SEZs and industrial clusters, provide viable pathways for linking public borrowing to productive investment and sustainable industrialization in Nigeria.