Nigeria's experience with external trade and industrialisation is a classic case of tragedy. Since independence the country has experienced rapid de-industrialisation, continuing loss of market share in traditional export markets, and increasing import dependence on especially food. Manufacturing value-added as a percentage of GDP was about five percent in 2000 (less than the proportion at independence in 1960), making Nigeria one of the 20 least industrialised countries in the world. This reversal in economic progress has occurred despite the top priority accorded industrialisation by successive post-independence governments, reflected in huge public investment in industry and the implementation of active industrial policy as well as restrictive trade policy. Studies investigating the causes of failure have typically omitted an analysis of political and sociological factors of African industrialisation. This paper points out that Nigerian industrial policies are pursued on an ad-hoc basis and are not well coordinated. It notes that Nigeria's few industries are concentrated in a small number major cities, the centres from which the political elites wield their power. Consequently, industrial location is not determined predominantly through entrepreneurial planning and decisionmaking; political considerations often dominate (Turton 1992). The political economy of the policy process, policy choice and implementation form the focus points of this paper.