The Manufacturers Association of Nigeria (MAN) has said that recent government interventions, including the Naira-for-Crude initiative and key tax reforms, could revive the country’s manufacturing sector if properly implemented.
The association noted that manufacturers have faced severe challenges over the past three years due to economic reforms that increased production costs, reduced capacity utilisation, limited access to credit, and triggered significant job losses.
In its latest three-year government assessment report, MAN Director-General, Segun Ajayi-Kadir, acknowledged that the reforms had created a foundation for long-term economic restructuring. However, he stressed that the next phase must focus on industrial recovery and sustainable growth.
According to Ajayi-Kadir, policies such as the Nigeria Industrial Policy and the Nigeria First framework could strengthen local manufacturing if consistently enforced across government institutions.
He said these initiatives have the potential to improve market access for locally made products, deepen value addition, and encourage industrial expansion.
Ajayi-Kadir also highlighted the benefits of the Naira-for-Crude initiative, saying it has reduced foreign exchange pressure in the downstream petrochemical and plastics sectors.
He added that fiscal measures that removed VAT and excise duties on pharmaceutical raw materials and medical devices have provided much-needed relief to local manufacturers.
The MAN chief further noted that the 2025 Tax Reform Act contains several provisions that could improve the business environment. These include withholding tax exemptions, expanded VAT deductibility on fixed assets and services, phased reductions in Companies Income Tax, research and development incentives, and fiscal relief for small and medium-scale industries.
He said the ongoing harmonisation of levies across states could reduce the burden of multiple taxation. He also described the National Single Window platform as an opportunity to simplify trade processes and improve supply chain efficiency.
Despite these positive developments, MAN warned that manufacturers continue to struggle with the impact of fuel subsidy removal, exchange rate liberalisation, rising electricity tariffs, and tight monetary policies.
Ajayi-Kadir said the removal of fuel subsidies in May 2023 led to a sharp increase in logistics and distribution costs, which surged by more than 300 per cent within weeks.
He also pointed out that electricity tariffs for Band A consumers rose significantly, increasing from about N68 per kilowatt-hour to between N209 and N225 per kilowatt-hour.
As a result, manufacturers have become increasingly dependent on alternative energy sources. MAN disclosed that spending on alternative energy climbed from N781.68 billion in 2023 to N1.11 trillion in 2024 and further increased to N1.34 trillion in 2025.
The association revealed that manufacturing capacity utilisation dropped from 61.3 per cent in the first half of 2025 to 57.7 per cent in the second half. During the same period, more than 18,900 jobs were affected.
Exchange rate volatility also intensified pressure on manufacturers. Ajayi-Kadir noted that the naira weakened from about N463 per dollar in June 2023 to N899 by December 2023 and later fell to approximately N1,535 by December 2024.
He explained that the depreciation significantly increased the cost of imported industrial inputs. According to MAN, the cost of imported raw materials rose from N3.04 trillion in 2023 to N6.64 trillion in 2024, representing an increase of about 118 per cent.
Manufacturing value-added also declined sharply, falling from $45.2 billion in 2023 to $21.84 billion in 2024.
The association further stated that inadequate access to foreign exchange remains a major obstacle, with less than half of industrial demand currently being met through official channels.
MAN also expressed concern over high borrowing costs. It noted that prime lending rates averaged 24.4 per cent as of March 2026, while maximum lending rates reached 33.8 per cent in several commercial banks.
The report showed that credit to the manufacturing sector fell from N10.88 trillion in February 2024 to N6.6 trillion by December 2025. Manufacturers also faced challenges arising from fluctuating customs duty assessments linked to exchange rate instability.
To support industrial recovery, MAN urged the Federal Government to prioritise affordable foreign exchange for productive activities, concessionary financing for industrial investments, stable electricity supply, and predictable trade policies.
Ajayi-Kadir said Nigeria’s long-term economic resilience depends on a strong manufacturing base capable of creating jobs, producing competitively, and expanding industrial value addition.
He maintained that current reforms can still deliver meaningful industrial transformation if implementation becomes more coordinated and responsive to the needs of productive sectors.
MAN’s position aligns with a growing conversation across Africa about manufacturing as a national security and economic resilience strategy.
In her contribution to The Boardroom Africa 2026 Industry Report, Founder and Managing Director of Senvoice, Marième Doukouré-Amoa, said African countries are increasingly prioritising domestic industrial capacity through tighter mining regulations and stronger local content requirements.
She noted that disruptions in global trade and supply chains have exposed vulnerabilities in existing systems and are prompting countries to focus on supply security, regional processing, and long-term value retention.
According to Doukouré-Amoa, industrial and manufacturing strategies across the continent are being redesigned to strengthen resilience and reduce dependence on external markets.
