Rising levels in Non-Performing loans (NPLs) which has remained an area of vast and diverse concerns contributed to the issues of declining manufacturing activities in Nigeria in the 1990s and thereafter. The study examined the relationship between NPLs and Manufacturing sub- sector productivity in Nigeria. Time series data obtained from CBN were analysed using exponential trend, Granger causality test, and simple regression model. Descriptive and inferential analyses revealed that, NPLs exhibited a negative exponential growth rate of -5.89%; while manufacturing sub-sector productivity declined at the rate of 6.60% during the study period. Empirical results from the regression analysis indicated an inverse significant relationship between NPLs and Manufacturing sub-sector productivity in Nigeria. Policy on intensive strategy for increased loans and advances to the sub-sector coupled with pragmatic reforms in the banking system as to accelerate investments in manufacturing sub- sector is recommended.