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By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has said the economic reforms introduced by the administration of President Bola Tinubu can still deliver meaningful industrial transformation if implementation becomes more coordinated, responsive to the needs of productive sectors, and focused on addressing structural constraints affecting manufacturers.
In its assessment titled Manufacturers Assess Impact of Recent Economic Reforms on Industrial Performance, MAN acknowledged that the reforms undertaken over the past three years have laid the foundation for long-term economic restructuring. However, the association stressed that macroeconomic stabilization must now translate into industrial recovery and sustainable growth.
Director-General of MAN, Segun Ajayi-Kadir, said the manufacturing sector requires a policy environment that deliberately supports production, lowers operating costs, and enhances competitiveness.
He urged the government to prioritize affordable access to foreign exchange for productive activities, concessionary financing for industrial investments, reliable electricity supply, and predictable trade policies.
According to him, Nigeria’s long-term economic resilience depends on a strong manufacturing sector capable of creating jobs, adding value locally, and producing competitively for domestic and export markets.
MAN described the last three years as a period of difficult but significant economic transition, noting that reforms such as fuel subsidy removal, exchange-rate liberalization, electricity tariff adjustments, and tight monetary policies were aimed at correcting long-standing economic distortions.
However, the association said manufacturers have borne a disproportionate share of the adjustment costs. The removal of fuel subsidy in 2023 led to a sharp increase in logistics and distribution expenses, while higher electricity tariffs significantly raised production costs despite continued instability in power supply.
As a result, manufacturers increasingly relied on alternative energy sources such as diesel, gas, and petrol. Expenditure on alternative energy rose from N781.68 billion in 2023 to N1.34 trillion in 2025. The increased cost burden contributed to a decline in manufacturing capacity utilization from 61.3 per cent in the first half of 2025 to 57.7 per cent in the second half of the year, while more than 18,900 jobs were affected during the period.
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MAN also highlighted the impact of exchange-rate liberalization. While the policy improved transparency in the foreign exchange market, the sharp depreciation of the naira significantly increased the cost of imported industrial inputs. The cost of imported raw materials rose from N3.04 trillion in 2023 to N6.64 trillion in 2024, while manufacturing value-added declined from $45.2 billion to $21.84 billion over the same period.
The association noted that although the Electronic Foreign Exchange Matching System improved market transparency, manufacturers still face inadequate access to foreign exchange through official channels.
Ajayi-Kadir further observed that tight monetary policies and rising interest rates have constrained industrial expansion. As of March 2026, prime lending rates averaged 24.4 per cent, while maximum lending rates reached 33.8 per cent in some commercial banks, making long-term industrial investment increasingly difficult.
Credit to the manufacturing sector declined from N10.88 trillion in February 2024 to N6.6 trillion by December 2025, reflecting the challenges facing industrial financing.
The sector also grappled with fluctuating import duty assessments linked to exchange-rate volatility, creating uncertainty for manufacturers importing machinery and raw materials. While the transition to the Authorized Economic Operator (AEO) programme introduced operational improvements for compliant manufacturers, frequent changes in customs exchange rates complicated planning and pricing.
Despite these challenges, MAN identified several government initiatives that could support industrial recovery. These include the Naira-for-Crude programme, fiscal incentives for pharmaceutical manufacturers, and provisions in the 2025 Tax Reform Act such as withholding tax exemptions, expanded VAT deductibility, phased reductions in Companies Income Tax, and incentives for research and development.
The association also welcomed efforts to harmonize levies across states, the Nigeria Industrial Policy, local-content procurement initiatives under the Nigeria First framework, and the National Single Window platform aimed at improving trade facilitation.
MAN said if these measures are effectively implemented and consistently enforced, they could improve market access for locally manufactured goods, deepen value addition, strengthen industrial capacity, and accelerate economic growth.
