The Manufacturers Association of Nigeria (MAN) has described the last three years as a period of painful but necessary economic transition, saying manufacturers have borne a significant share of the burden arising from the Federal Government’s reform agenda.<\/p>\n
In its assessment of the administration’s economic policies, by its Director-General, Mr Segun Ajayi-Kadiri, MAN acknowledged that reforms such as fuel subsidy removal, foreign exchange liberalization, electricity tariff adjustments and tight monetary policies were aimed at correcting long-standing structural distortions and positioning the economy for sustainable growth.<\/p>\n
The association, however, noted that the implementation and sequencing of these policies placed enormous pressure on manufacturers, resulting in soaring production costs, declining capacity utilization and job losses across the sector.<\/p>\n
According to MAN, the immediate removal of fuel subsidy in May 2023 triggered a sharp rise in logistics and distribution expenses, with transportation costs increasing by more than 300 per cent within weeks. <\/p>\n
The situation, MAN, said was compounded by higher electricity tariffs for Band A consumers, which rose from about \u20a668 per kilowatt-hour to between \u20a6209 and \u20a6225 per kilowatt-hour.<\/p>\n
Despite the steep tariff increase, electricity supply remained unstable due to persistent grid collapses and system disruptions, forcing manufacturers to depend heavily on diesel, gas and petrol-powered alternatives to sustain operations.<\/p>\n
As a result, spending on alternative energy sources climbed from \u20a6781.68 billion in 2023 to \u20a61.11 trillion in 2024 and further to \u20a61.34 trillion in 2025.<\/p>\n
The mounting operational costs weakened industrial competitiveness and 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. More than 18,900 jobs were also affected during the period under review.
\nMAN further observed that the liberalization of the foreign exchange market produced mixed results for the sector. <\/p>\n
While exchange rate unification improved transparency and reduced market distortions, the rapid depreciation of the naira significantly increased the cost of imported industrial inputs.<\/p>\n
The exchange rate moved from about \u20a6463 to the dollar in June 2023 to \u20a6899 by December of the same year and later to approximately \u20a61,535 by December 2024.<\/p>\n
Consequently, the cost of imported raw materials surged from \u20a63.04 trillion in 2023 to \u20a66.64 trillion in 2024, representing an increase of about 118 per cent. Manufacturing value-added also dropped sharply from $45.2 billion in 2023 to $21.84 billion in 2024.<\/p>\n
Although the introduction of the Electronic Foreign Exchange Matching System enhanced transparency in the market, MAN said manufacturers continue to face inadequate access to foreign exchange at the official window, with less than half of industrial demand currently being met.<\/p>\n
The association also pointed to the impact of tight monetary policy, noting that repeated increases in the Monetary Policy Rate between 2023 and 2024, alongside reduced credit intervention programmes, drove borrowing costs to levels that discouraged industrial investment.<\/p>\n
As of March 2026, prime lending rates averaged 24.4 per cent, while maximum lending rates reached as high as 33.8 per cent in some commercial banks. <\/p>\n
Consequently, credit to the manufacturing sector declined from \u20a610.88 trillion in February 2024 to \u20a66.6 trillion by December 2025.<\/p>\n
MAN further highlighted challenges arising from fluctuating customs duty assessments linked to exchange rate volatility, saying the development made business planning difficult and increased inflationary pressures on locally manufactured products.<\/p>\n
The association noted that while the Nigeria Customs Service’s transition from the Fast Track Scheme to the Authorized Economic Operator (AEO) programme initially created concerns, the full implementation of the AEO framework in 2025 has provided benefits for compliant manufacturers through faster cargo clearance and improved port operations.<\/p>\n
Despite the difficulties, MAN acknowledged several recent policy measures that could support industrial recovery.<\/p>\n
These include the Naira-for-Crude initiative, which has eased foreign exchange pressure in the downstream petrochemical and plastics value chain, as well as fiscal measures that exempted pharmaceutical raw materials and medical devices from VAT and excise duties.<\/p>\n
The association also welcomed provisions contained in the 2025 Tax Reform Act, including withholding tax exemptions, expanded VAT deductibility, phased reductions in Companies Income Tax, research and development incentives, and support measures for small and medium-sized industries.<\/p>\n
According to MAN, the Nigeria Industrial Policy, the Nigeria First local content framework, ongoing harmonization of levies across states and the launch of the National Single Window platform all have the potential to strengthen domestic manufacturing, improve market access and enhance supply chain efficiency if effectively implemented.<\/p>\n
While commending the government’s commitment to economic restructuring, MAN stressed that the focus must now shift from macroeconomic stabilization to industrial recovery and growth.<\/p>\n
The association urged authorities to provide affordable access to foreign exchange for productive sectors, expand concessionary financing for manufacturers, ensure stable electricity supply and maintain predictable trade policies.<\/p>\n
“Nigeria cannot achieve sustainable economic prosperity without a strong manufacturing base,” MAN stated, adding that the success of ongoing reforms will ultimately depend on how effectively they address the structural constraints limiting industrial productivity, job creation and value addition.<\/p>\n
PHOTO: Segun Ajayi-Kadir, Director General of the Manufacturers Association of Nigeria (MAN)<\/p>\n","protected":false},"excerpt":{"rendered":"
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