Despite the tough business environment last year, operators in the manufacturing sector benefited from improved macro-economic stability, which manifested in relative naira stability, easing inflationary pressures and economic growth of about 3.4 to 3.9 per cent. Encouraged by the measure of predictability that came their way, manufacturers and other businesses are cautiously optimistic about a stronger growth of the sector in 2026. They, however, hinge their optimism on fiscal policy clarity, sustained economic reforms and adequate infrastructure. Assistant Editor CHIKODI OKEREOCHA reports.
Even before 2026 kicked in, a wind of optimism, though measured, was already sweeping through Nigeria’s manufacturing and business landscape, drawing strength from improved macro-economic stability in the previous year 2025.
For instance, the local currency, the naira, was relatively stable, while inflation trended downwards from 34 per cent to 14.5 per cent, as reported by the National Bureau of Statistics (NBS) over several consecutive months.
Also, with economic growth of about 3.4 to 3.9 per cent, heading towards four per cent, not a few manufacturers agree that 2025 was a relatively stable year for the sector. “It was a stable year. We saw stability in the naira, inflation trending downwards, and economic growth of about 3.4 to 3.9 per cent, heading towards four per cent. That stability was a good thing for manufacturers,” the Managing Director/CEO, Coleman Technical Industries Limited, Mr George Onafowokan said.
Onafowokan, who spoke while assessing business conditions and expectations for the coming year, confirmed that manufacturers benefited from improved macroeconomic stability, including relative naira stability, easing inflation and steady economic growth. He also expressed optimism that clearer fiscal policies and sustained economic reforms could unlock stronger growth for the sector and, by extension, the economy, from 2026.
The Director, Research and Economic Policy Division, Manufacturers’ Association of Nigeria (MAN), Dr Oluwasegun Osidipe, also projected a stronger Gross Domestic Product (GDP) growth, a stronger naira, a sustained decline in inflation, as well as improved access to credit for manufacturers and other businesses in 2026.
Osidipe, who made the projections in Lagos at a news conference on the 2025 MAN Think Tank Session, however, predicated these projections on favourable oil prices, rising foreign investments, stable energy costs, and the effective implementation of key industrial and fiscal policies. He said the projections, if actualised, would lead to higher manufacturing output.
The 2025 MAN Think Tank Session provided a platform for academics, industry experts and policy strategists to engage in a constructive dialogue, share expertise and develop groundbreaking solutions to the pressing challenges affecting the manufacturing sector.
At the Session, Osidipe specifically said: “For manufacturers, naira is projected to appreciate further to N1, 300–N1, 400/$, driven by global oil price recovery, stronger external reserves, robust export earnings, increased foreign investments, and remittance inflows. Headline inflation will decelerate further to 14 per cent, supported by easing food prices, stable energy prices, and appreciation of the naira.
The MAN Director of Research further said: “The Central Bank of Nigeria (CBN) is anticipated to implement further cuts in the benchmark interest rate to about 23 per cent, in line with disinflationary trend, and to stimulate credit expansion and output growth. Further reduction in lending rates and completion of the bank recapitalisation exercise will enhance credit availability to manufacturers, strengthening investment and capacity utilisation.”
Osidipe did not stop there. He said for manufacturing output, real growth was projected to reach 3.1 per cent while contribution to real GDP was expected to rise to 10.2 per cent. He, however, said the expected gains will be propelled by the effective execution of new tax laws’ incentives, operationalisation of the National Single Window Project, and purposeful implementation of the Nigeria Industrial Policy in close alignment with the “Nigeria First” policy framework.
While Nigeria’s economic growth of about 3.4 to 3.9 per cent was heading towards four per cent, according to Onafowokan, Osidipe aligned with him, noting that overall GDP growth was expected to reach four per cent in 2026 due to higher oil output and further improvement in fiscal space. He added that expansion in financial and manufacturing sectors, and heightened consumption during the election campaigns in Q4 2026, would also spur GDP growth.
But as promising as 2026 appears, Onafowokan expressed his hope that the Federal Government will sign off on some fiscal policy recommendations, which, according to him, will impact manufacturers in terms of tariffs and help boost capacity utilisation and industry growth. He said many manufacturers were yet to fully benefit from improved macroeconomic stability due to delays in implementing key fiscal policies.
The MD/CEO of Coleman, manufacturers of wires and cables, lamented that fiscal policy measures proposed since 2023 were yet to be signed, leading to missed opportunities in 2024 and 2025.
“One key issue is the fiscal policy measures which have not been signed till now. We’ve missed 2024 and 2025, and we are hoping that by 2026, the government will sign off on these fiscal policy recommendations,” he said.
However, looking ahead to 2026, which coincides with a pre-election year, Onafowokan expressed cautious optimism, citing positive budgetary signals, particularly increased capital expenditure, exchange rate stability and the prospect of easing interest rates.
“We see a positive outlook for growth. There are growing domestic investment, renewed foreign direct investment, infrastructure development and opportunities in sectors like oil and gas, telecoms and fibre optics,” he said.
“These developments could make 2026 a catalyst year for sustained strategic growth,” he emphasised, pointing out, however, that on the implementation of the new tax laws that began on January 1, 2026, misinformation is the biggest concern for businesses and investors. “There is more misinformation than correct information. The government needs to do more to explain the tax laws and their benefits,” he said.
While commending aspects of the reforms that provide relief for low-income earners, Onafowokan warned that poor communication and immediate enforcement without sufficient transition time could distort markets, recalling how misinformation recently triggered significant losses in the stock market.
He also clarified that withholding tax on savings interest remains a final tax, dismissing fears of double taxation, and urged authorities to intensify public education on the reforms. He, however, welcomed the Federal Government’s focus on security and infrastructure in the 2026 budget, describing both as critical enablers of economic growth.
“Security is crucial to investment and growth. Infrastructure spending—on roads, housing, power, hospitals and education—is a catalyst for development. It opens up new markets, creates jobs and drives economic expansion across regions,” he said.
President of MAN, Otunba Francis Meshioye, could not agree less with Onafowokan. “Infrastructure gaps persist, particularly in logistics and transportation. Insecurity continues to inhibit progressive business planning and operations. In general, and despite the onset of relative stability, a lot still needs to be done to overcome macroeconomic headwinds,” he said.
Meshioye, who spoke at the opening ceremony of the 3-day Made-in-Nigeria Exhibition as part of the Association’s 53rd Annual General Meeting (AGM) held in Lagos, recently, added that energy costs remain astronomically high, while access to credit is constrained by rising interest rates and limited long-term finance. “We must take intentional action to overcome these binding constraints,” he stated.
Indeed, infrastructure, particularly the asphyxiating cost of energy or electricity has been thorn in the flesh of manufacturers. With the hike in electricity tariffs of more than 250 per cent, many manufacturers say their energy bills have become unbearable. Those who turned to diesel-powered generators spend up to half their operating costs on fuel.
For instance, manufacturers’ cost of alternative energy in H1 2025 stood at N676.6 billion, according to data made available to The Nation by MAN. Though, down from N708.1 billion in H2 2024, the Association said the figure remained heavy burden on operational cost.
“Power alone is a tax on productivity. You cannot talk about competitiveness when your factories run on self-generated power at four or five times what producers elsewhere pay,” lamented MAN’s Director-General, Segun Ajayi-Kadir.
Other persistent and binding constraints that might stand in the way to unlocking stronger growth for the manufacturing sector in 2026 and beyond, include policy inconsistencies, weak domestic demand due to high inflation and supply chain disruptions (like port inefficiencies) and high operating costs, among others.
Actionable path to realising the projected growth
Despite the heart-warming macro-economic indicators in 2025 and the resultant favourable outlook and projections that have put manufacturers and other business in an expectant mood, unlocking stronger growth for the manufacturing sector in 2026 and beyond will not be a stroll in the park, considering the myriads of binding constraints that stand in the way.
Ajayi-Kadir admitted that Nigeria’s economy is on a path of gradual recovery, a fact he said has been reaffirmed by the modest yet consecutive rise in the Manufacturers CEO’s Confidence Index (MCCI) since Q2 2025. He, however, said while the stabilisation path has been cleared, what lies ahead is the imperative of accelerated growth.
He, therefore, said to sustain this trajectory in 2026 and beyond, exchange rate stability must be guarded with every available policy tool. “Currency stability is more than a macro-economic metric, it is a reflection of national resolve,” he stated, noting that “one of the biggest threats to the hard-won stabilisation is a decline in oil production, as witnessed in August and September.”
Although Ajayi-Kadir admitted that global oil prices remain entirely outside Nigeria’s control, he, however, said the country retains considerable influence over its production levels; a domestic variable that must be managed with urgency and precision.
“The government must, therefore, take decisive measures to reach the OPEC quota by tightening pipeline security and upgrading operational infrastructure. Also, the government should sustain the increase in refining capacity by forestalling any further industrial disputes in the mainstay of the economy,” he stated.
He also called for further reduction of the benchmark interest rate by at least 200–300 basis points to make credit affordable for manufacturers as well as launch a Manufacturing Refinancing and Rediscounting Facility (MRRF) that allows banks to refinance approved manufacturing loans at single-digit rates for up to seven years.
Although manufacturers commend the Central Bank of Nigeria (CBN’s) recent benchmark interest rate cut, which, according to them, signals a welcome policy shift. They, however, insist that the time has come for the apex bank to take a bolder step by introducing a deeper rate cut that can meaningfully lower the cost of credit and stimulate real sector investment.
“Growth cannot thrive where capital remains prohibitively expensive” Ajayi-Kadir emphasised, adding that on the fiscal front, the development and implementation of the Nigeria Industrial Policy is long overdue. “It (i.e. Industrial Policy) must be aligned with the “Nigeria First” Policy and highly private sector-driven, ensuring coherence between policy intent and industrial realities,” he said.
Ajayi-Kadir further stated that as the country prepares for the implementation of new tax laws this January 2026, shared ownership and strict adherence to execution plans will be critical.
He said: “Progressive tax reforms can only deliver their promise of higher revenue, improved living standards and a more enabling business environment when enforcement is disciplined and predictable.”
Accordingly, he called for the establishment of a Tax Policy Implementation and Evaluation Unit under the Federal Ministry of Finance to regularly assess how the new tax regime affects investment, manufacturing costs and Medium, Small and Micro Enterprise (MSME) performance.
President Bola Tinubu signed the Tax Reform Act in June, 2025. Rather than simply raising taxes, the law aimed to streamline the chaotic system, setting the stage for a new fiscal era starting January 2026. Accordingly, the new tax laws, which took effect from January 1, aims at simplifying tax compliance, broaden the tax base and boost revenue.
The Nigeria Tax Act 2025 consolidates multiple tax laws, including Companies Income Tax, Personal Income Tax and Value Added Tax, into a unified framework. The reforms aim to promote fiscal stability, transparency, and accountability, while supporting economic growth and development.
Ahead of its implementation, has thrown its weight behind the new tax regime, with Ajayi-Kadir saying that manufacturers are optimistic that a more business-friendly tax regime is in the offing. Their hope is that the tax reforms would put an end to multiple and sometimes illegal taxes by various tiers of government.
This is because the reforms streamline revenue administration and eliminate multiple, overlapping taxes by consolidating over a dozen federal tax laws into a single unified statute and encouraging states to do the same.
Continuing, Ajayi-Kadir stressed the need to categorise manufacturers as strategic users of gas, pointing out that this will remove the gap between what manufacturers and electricity generation companies pay per cubic foot of gas. He also harped on the need to introduce a stable, transparent gas pricing framework for manufacturers and prioritize local gas supply before exports.
Other actionable recommendations put forward by the MAN D-G to boost the manufacturing sector’s output and competitiveness include offering tax credits and recognition awards to companies and consumers patronising locally manufactured goods and creating a dedicated manufacturing FX window to ensure access to forex for raw materials and machinery.
Push for punitive measures for violators of Nigeria First policy
President Tinubu, on May 5, 2025, approved the Renewed Hope Nigeria First policy that mandates all federal Ministries, Departments and Agencies (MDAs) to give absolute priority to Nigerian goods, services and know‑how when spending public funds.
The policy, which mirrors the US President Donald Trump’s “America First” doctrine places Nigeria at the centre of all public procurement and business activity, with a strong emphasis on empowering local industries and reducing dependency on imports.
The ‘Renewed Hope Nigeria First’ Policy was aimed at strengthening Nigeria’s domestic economy, prioritising local industry and boosting the country’s industrial transformation.
Specifically, the policy focuses on accelerating industrialisation, promoting manufacturing, and leveraging digital technology to enhance local production and reduce reliance on raw material exports.
Key elements of the policy include targeted funding for small-scale entrepreneurs and Micro, Small, and Medium Enterprises (MSMEs), including N50 billion in grants and N75 billion for MSMEs and manufacturing through the Bank of Industry (BoI).
The policy aligns with Nigeria’s broader industrial development goals, including the Nigeria Industrial Revolution Plan, which aims to significantly increase manufacturing’s contribution to GDP and create jobs by boosting local production and industrial capacity.
But, MAN has urged the Federal Government to gazette policy and make it a binding law, with punitive measures for violators. Ajayi-Kadir said this was critical to give the policy legal standing, ensuring transparency, public awareness, and enforceability across government institutions and the private sector.
While commending the Federal Government for the policy pronouncement, the MAN D-G stated that the country anxiously awaits the initiative’s expedited consummation and its effective implementation.
He stressed the need to gazette the Nigeria First policy and make it a binding law, and punitive measures put in place for violators. According to him, the policy must quickly move from initiation to government policy, lest it suffers the same fate as the Executive Orders 003 and 005.
Recall that the Federal Government, some years ago, put the spotlight on local manufacturing, coming out with the Executive Order 003, which stated that all Ministries, Departments and Agencies (MDAs) shall grant preference to local manufacturers in the procurement of goods and services.
Also, the Executive Order 005 directed all MDAs to engage indigenous professionals in the planning, design and execution of national security projects and maximise in-country capacity in all contracts and transactions with science, technology and engineering components.
Sadly, however, the Executive Orders 003 and 005 were marred by lax compliance and shoddy implementation.
Ajayi-Kadir said with Nigeria First policy, “Nigeria must seize this moment to transform its manufacturing sector by prioritising the patronage of local products,” noting that “If we fail to nurture our own, we will forever be at the mercy of others.”
He also called on consumers to prioritise and actively support locally made products to help stimulate demand for domestic manufacturing. “By choosing Nigerian-made goods, consumers can contribute to the sector’s resilience and growth, fostering economic development and job creation,” he said.
In coming forward with the foregoing recommendations, Ajayi-Kadir said manufacturing, ultimately, remains the heartbeat of sustainable recovery and the catalyst for inclusive growth. He argued that no economy has ever prospered on consumption alone.
“Nations rise by producing what they consume and exporting what they produce. To secure the gains of stabilisation and accelerate prosperity, Nigeria must make manufacturing the nucleus of its growth strategy,” he urged.
