After reserving a fragile development and declining contribution to the nation’s financial development, Nigerian producers are optimistic that the sector’s contribution to Gross Home Product will hit 10.2% in 2026, writes Dike Onwuamaeze
Nigerian producers are optimistic concerning the New 12 months. They’re hoping that their fortunes could be higher in 2026 than it was in 2025 when the manufacturing sector posted a fragile development of 1.6 per cent and contributed 7.62 per cent to the nation’s gross home product (GDP). Therefore, the Producers Affiliation of Nigeria (MAN) is projecting that the sector’s actual development would attain 3.1 per cent whereas its contribution to actual GDP is predicted to rise to 10.2 per cent.
The producers hinged their optimism on three premises. The primary is the anticipated efficient execution of incentives for below the brand new tax legal guidelines. The second is the operationalisation of the Nationwide Single Window Challenge and the third is the purposeful implementation of the Nigeria Industrial Coverage in shut alignment with the “Nigeria First” Coverage framework.
They’re additionally hoping that sustained discount in lending charges and completion of the financial institution recapitalisation train “will improve credit score availability to producers” and strengthen funding and capability utilisation within the manufacturing sector.
In its financial outlook for Nigeria in 2026, PwC famous that adoption of know-how within the manufacturing sector accelerated in 2025 with widespread deployment of blockchain, AIpowered predictive upkeep, automation, and IoT-driven good manufacturing unit programs.
PwC, due to this fact, projected that in 2026, manufacturing output is projected to develop by round 3.1 per cent, supported by new tax incentives, harmonised levies, and deeper adoption of AI automation and good manufacturing unit fashions.
It additionally stated that in 2026, funding inflows are anticipated to extend reasonably if ongoing tax incentives, credit score help, and infrastructure enhancements materialise.
Regardless of this, PwC warned that restricted entry to inexpensive credit score, excessive borrowing prices, and infrastructure gaps culd constrain widespread funding throughout large-scale manufacturing tasks.”
The Head of Fairness Analysis West Africa at Stanbic IBTC Financial institution, Mr. Muyiwa Oni, expressed hope that higher days are on the way in which of the Nigerian manufacturing sector.
Oni stated: “We now see the Nigerian economic system rising by 3.8 per cent y/y in 2025 and 4.1 per cent y/y in 2026. Each manufacturing and companies are prone to see greater development in 2025 in comparison with 2024 ranges, based mostly on the outcomes from the PMI surveys to date this 12 months.
“Elsewhere, the federal government has been seen in infrastructure, livestock growth, easing commerce constraints, and attracting investments in oil and fuel and manufacturing.
“Other than that, the Dangote refinery is predicted to proceed to have forward-linkage impression on different sectors of the economic system. Moreover, probably decrease rates of interest according to decrease inflation and alternate charge stabilisation ought to help personal consumption and enterprise investments in 2026.
“Due to these components, we see extra sectors contributing to actual GDP development charge in 2026 in comparison with 2025, probably translating to an enchancment within the high quality of lives of the residents in comparison with 2025.”
In its outlook for the manufacturing sector in 2026, the Centre for the Promotion of Personal Enterprises (CPPE), stated that the macro-economic positive factors that had been recorded in 2025 would have optimistic impacts on the manufacturing sector. These macro-economic positive factors included higher international alternate market stability with prospects of gradual appreciation and deceleration in inflation that might finally translate into decrease rates of interest
The Chief Govt Officer of CPPE, Dr. Muda Yusuf, stated, “Given the import-dependent nature of Nigerian manufacturing, FX stability alone provides significant reduction on enter prices and planning certainty.”
Yusuf additionally stated that the enhancing macroeconomic fundamentals are anticipated to help higher manufacturing outcomes in 2026, particularly for corporations which can be backward-integrated, much less uncovered to FX volatility and higher aligned with home enter sourcing.
“These segments are prone to document stronger returns on funding below present reform circumstances,” he stated.
Yusuf, nonetheless, warned that the optimistic expectations for the manufacturing sector should be rigorously managed. He identified that structural bottlenecks in power, logistics and ports couldn’t be resolved inside a single fiscal 12 months.
“The largest dangers to manufacturing development stay structural. Excessive power and logistics prices, costly and short-tenured financing, unmanaged import competitors, which might crowd out native producers if commerce coverage is weak. With out addressing these dangers, Nigeria’s manufacturing sector will stay structurally uncompetitive,” Yusuf stated.
Yusuf’s referred to as for managed expectations may not be misplaced. These structural challenges hindering the total realisation of the the potentials of the manufacturing sector, might need knowledgeable the PwC conclusion that the service-sector would lead Nigeria’s financial development in 2026. It stated that persistent structural bottlenecks in the actual economic system, particularly agriculture, manufacturing and commerce, are prone to stay constrained by insecurity, excessive power and logistics prices, port inefficiencies, and import dependence.
It stated, “These structural challenges are anticipated to proceed suppressing productiveness and elevating working prices throughout the actual economic system.
“Because of this, restoration in employment-intensive sectors might stay gradual in 2026 regardless of ongoing reforms and funding commitments.”
It recalled that in Q3 2025, the sector grew by 1.25 per cent, contributing 7.62 per cent to GDP regardless of structural challenges akin to excessive power and logistics prices, dependence on imported inputs, and weak export competitiveness.
“Uncooked materials imports remained excessive at N3.53trillion in H12025, whereas manufactured items exports had been restricted, highlighting a persistent commerce deficit and the necessity for stronger native manufacturing and export capability.
“In 2026, demand for manufactured items is predicted to enhance modestly as inflation eases and shopper buying energy stabilizes,” PwC stated.
The MAN CEO’s Confidence Index (MCCI) for Q3 2025 stated that the manufacturing sector is over burdened with different power price of N676.6 billion and uncooked materials import of N1.72 trillion in H1 2025. The sector additionally recorded 18,935 job losses in the identical interval.
The MCCI additionally reported excessive common lending charges of 36.6 per cent, a discount in credit score entry to N7.72 trillion and rising unsold inventories of N1.04 trillion proceed to restrict efficiency.
“Total, the sector’s fragile restoration requires pressing coverage actions to chop power prices, strengthen FX liquidity and broaden inexpensive credit score entry to speed up development,” the MCCI stated.
Commenting on the MCCI, the Director Basic of MAN, Mr. Segun Ajayi-Kadir, stated that it is very important emphasise that every one present indices of the MCCI had been beneath the 50-point threshold, indicating that the underlying challenges, significantly excessive inflation, alternate charges and rates of interest have continued to weigh on the sector.
He stated: “On a brighter observe, the projected indices for the following quarter all stay above 50 factors, displaying sustained optimism amongst producers.
“This optimism is buoyed not solely by latest coverage changes, such because the 50-basis level lower within the benchmark rate of interest, the suspension of the 4.0 per cent Free-on-Board levy and the approval of tax incentives for native sourcing of uncooked supplies, but additionally by robust expectations that the forthcoming Nationwide Industrial Coverage might be extremely personal sector-driven.
“Producers are assured {that a} coverage framework anchored on personal sector participation will catalyse industrial competitiveness, stimulate productive funding and open new frontiers for development.”
He added, “There may be additionally a heightened anticipation for the Presidential assent to the 30 per cent worth addition requirement on uncooked materials exports, a coverage that guarantees to deepen backward integration, cut back international alternate publicity and increase Nigeria’s export competitiveness.
“Additional evaluation reveals that 9 out of 14 industrial zones recorded greater confidence scores, whereas 10 carried out above the 50-point threshold, pointing to a gradual strengthening of optimism throughout a number of manufacturing hubs within the nation.”
“It’s, nonetheless, pertinent to notice that this restoration is fragile and will simply falter if manufacturing doesn’t obtain deliberate, sufficient industry-friendly interventions.
“As we frequently say within the industrial neighborhood, a nation that neglects manufacturing might develop in numbers, however not in wealth. Actual development begins solely when uncooked potential is refined into productive capability,” he stated.
