UNCTAD Warns of Deindustrialization Risks in LDCs

The United Nations Conference on Trade and Development (UNCTAD) has raised concerns regarding the trend of premature deindustrialization in least developed countries (LDCs) in its latest report, "Least Developed Countries Report 2025." The report indicates that many LDCs are experiencing a shift from manufacturing-led growth to service-driven economies, which could undermine long-term economic transformation. It highlights a widening disparity in development pathways, with low-income countries bypassing traditional industrialization.

UNCTAD notes that while some LDCs maintain a manufacturing-led growth pattern, others are directly transitioning from agriculture to services, raising concerns about sustainable productivity. The report warns that without a strong industrial base, service sector expansion could lead to economic imbalances and vulnerabilities.

It emphasizes the importance of carefully managing service sector growth and integrating industrial strategies to ensure sustainable development outcomes. The Nigerian federal government has initiated plans to strengthen its domestic manufacturing base and reduce reliance on imported goods by January 2025.