By Ijeoma Agbafo
Nigeria’s food and beverage industry is facing a deepening crisis as rising production costs, foreign exchange instability, and declining consumer purchasing power continue to threaten jobs and business sustainability across the sector.
The alarm was raised by the Food, Beverage and Tobacco Senior Staff Association (FOBTOB) during the 114th Session of the International Labour Conference in Geneva. FOBTOB President, Oyibo Jimoh, warned that many companies are struggling to remain operational due to the combined impact of naira volatility, soaring input costs, and regulatory challenges. According to the union, several firms have already reduced their workforce, scaled down production, or are considering shutting down operations entirely.
Industry stakeholders say the situation is particularly severe because many food and beverage manufacturers depend heavily on imported raw materials, packaging materials, and production equipment. The depreciation of the naira has significantly increased the cost of these imports, while high energy prices and transportation expenses have further squeezed profit margins. At the same time, declining purchasing power among consumers has weakened demand, making it difficult for companies to pass rising costs on to customers.
The challenges facing the sector reflect broader economic difficulties confronting Nigeria, including persistent inflation, high food prices, and foreign exchange shortages. Labour leaders are therefore calling on the federal government to introduce urgent measures such as improved access to foreign exchange for manufacturers, support for local sourcing of raw materials, and policies aimed at reducing the cost of doing business. They warn that failure to act could lead to more layoffs, company closures, and increased pressure on the country’s food security and unemployment situation.
Experts believe that while larger manufacturers may have the capacity to absorb some of the economic shocks, smaller firms remain especially vulnerable. Unless economic conditions improve and targeted interventions are implemented, the sector could witness further contraction in the coming months, with significant implications for workers, consumers, and the wider Nigerian economy.
