Manufacturers Back Policy Reforms
The Manufacturers Association of Nigeria (MAN) has said recent government reforms could revive the manufacturing sector if authorities implement them effectively.
The association highlighted key initiatives, including the Naira-for-Crude programme, the Nigeria Industrial Policy, withholding tax exemptions, expanded VAT deductibility on fixed assets and services, phased cuts in Companies Income Tax, research and development incentives, and fiscal relief measures for small and medium industries.
According to MAN, these policies can strengthen industrial growth and improve competitiveness across the sector.
Manufacturers Bear Reform Burden
MAN noted that manufacturers have faced significant challenges since the introduction of major economic reforms over the past three years.
The association said rising production costs, lower capacity utilisation, restricted access to credit, and widespread job losses have affected industrial operations.
In its recent three-year assessment of government performance, MAN Director-General, Segun Ajayi-Kadir, acknowledged that the reforms have laid the groundwork for long-term economic restructuring.
However, he stressed that policymakers must now focus on industrial recovery and sustainable growth.
Industrial Policy Offers Hope
Ajayi-Kadir said the Nigeria Industrial Policy and the Nigeria First procurement framework could strengthen domestic manufacturing.
According to him, consistent implementation across government institutions would improve market access for locally made products.
He added that stronger local content policies could deepen value addition and encourage industrial expansion.
Naira-for-Crude Brings Relief
The MAN chief stated that the Naira-for-Crude initiative has eased foreign exchange pressure within the petrochemical and plastics industries.
He also noted that VAT and excise duty exemptions on pharmaceutical raw materials and medical devices have reduced costs for manufacturers.
Furthermore, he said the 2025 Tax Reform Act introduced several measures capable of improving the business environment.
These measures include withholding tax exemptions, wider VAT deductibility, lower corporate tax rates, research incentives, and fiscal support for smaller businesses.
Trade Reforms Could Reduce Costs
Ajayi-Kadir explained that ongoing efforts to harmonise levies across states could reduce the burden of multiple taxation.
In addition, he said the National Single Window platform could simplify trade processes and improve supply chain efficiency.
As a result, manufacturers may benefit from smoother business operations and lower transaction costs.
Rising Costs Continue to Hurt Industry
Despite the positive outlook, MAN said several reforms have increased operating expenses for manufacturers.
The association pointed to fuel subsidy removal, exchange rate liberalisation, electricity tariff hikes, and tight monetary policies as major challenges.
Ajayi-Kadir revealed that logistics and distribution costs surged by more than 300 per cent after fuel subsidy removal in May 2023.
Similarly, electricity tariffs for Band A customers rose from about N68 per kilowatt-hour to between N209 and N225 per kilowatt-hour.
Energy Costs Reach Record Levels
The association said unreliable electricity supply continues to force manufacturers to rely on alternative energy sources.
Consequently, spending on alternative energy increased from N781.68 billion in 2023 to N1.11 trillion in 2024.
The figure climbed further to N1.34 trillion in 2025.
Meanwhile, manufacturing capacity utilisation dropped from 61.3 per cent in the first half of 2025 to 57.7 per cent in the second half.
The sector also recorded the loss of more than 18,900 jobs during the period.
Forex Challenges Persist
MAN said exchange rate liberalisation significantly increased the cost of imported industrial inputs.
The naira weakened from about N463 per dollar in June 2023 to N899 by December 2023.
By December 2024, the exchange rate had reached approximately N1,535 per dollar.
As a result, imported raw material costs rose from N3.04 trillion in 2023 to N6.64 trillion in 2024.
The association added that manufacturing value-added declined sharply from $45.2 billion in 2023 to $21.84 billion in 2024.
Credit Access Remains Difficult
The group also expressed concern over limited access to foreign exchange through official channels.
According to MAN, less than half of industrial forex demand is currently being met.
Ajayi-Kadir further stated that high interest rates continue to limit industrial expansion.
Prime lending rates averaged 24.4 per cent as of March 2026, while some commercial banks charged up to 33.8 per cent.
Additionally, credit to the manufacturing sector fell from N10.88 trillion in February 2024 to N6.6 trillion by December 2025.
MAN Calls for Targeted Support
The association urged the Federal Government to prioritise affordable foreign exchange access for productive sectors.
It also called for concessionary financing, reliable electricity supply, and predictable trade policies.
Ajayi-Kadir stressed that Nigeria cannot achieve sustainable prosperity without a strong manufacturing base.
He said the country’s long-term resilience depends on competitive production, local job creation, and increased industrial value addition.
Experts Advocate Industrial Resilience
MAN’s position aligns with broader discussions across Africa on manufacturing and economic security.
Founder and Managing Director of Senvoice, Marième Doukouré-Amoa, said African countries are strengthening local content policies and tightening oversight in strategic sectors.
According to her, governments are moving away from passive participation in global value chains.
She added that recent global disruptions have exposed weaknesses in supply chains and processing systems.
As a result, many countries are now focusing on supply security, regional processing, and long-term value retention.
