Prospects for a rebound in manufacturing sector in 2026 exist…—-MAN

The Manufacturers Association of Nigeria (MAN) has said that prospects for a rebound in the manufacturing sector in 2026 in Nigeria exist provided favourable macroeconomic indicators are improved upon, alongside deliberate policy execution.

Director-General MAN, Segun Ajayi-Kadir, said this in the manufacturing sector outlook for the 2026 report in Lagos. Mr Ajayi-Kadir hinged the sector’s performance in 2026 on expectations of a stronger naira, easing inflation and lower interest rates.

He, however, stressed that the gains would depend largely on effective policy execution and targeted government support. He said that the Naira was 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.

He added that headline inflation would decelerate further to 14 per cent, supported by easing food prices, stable energy prices, and appreciation of the naira. Mr Ajayi-Kadir said the Central Bank of Nigeria (CBN) was anticipated to implement further cuts in the benchmark interest rate to about 23 per cent, in line with the disinflationary trend and to stimulate credit expansion and output growth.

He added that further reduction in lending rates and completion of the bank recapitalisation exercise would enhance credit availability to manufacturers, strengthening investment and capacity utilisation.
“Real growth is projected to reach 3.1 per cent, while contribution to real gross domestic product (GDP) is expected to rise to 10.2 per cent.

“Overall GDP growth is expected to reach 4 per cent in 2026 due to higher oil output, further improvement in fiscal space, and expansion in financial and manufacturing sectors.

“These gains, however, hinge on the effective execution of incentives under the new output tax laws, the operationalisation of the national single window and purposeful implementation of the Nigeria Industrial Policy in close alignment with the ‘Nigeria First’ Policy framework,” he said.

Mr Ajayi-Kadir listed recommendations to support manufacturing in 2026 to include further reduction of the benchmark interest rate by at least 200-300 basis points over the next two quarters to make credit affordable for manufacturers.
He called for the introduction of the Manufacturing Refinancing and Rediscounting Facility (MRRF) that allowed banks to refinance approved manufacturing loans at single-digit rates for up to seven years.

The MAN director general also advocated a publicly accessible dashboard tracking lending flows, interest rate spreads, loan approval and sectoral disbursement patterns in real time.

He called for the effective execution of the implementation strategy for the recently approved Nigeria Industrial Policy. Mr Ajayi-Kadir urged the categorisation of manufacturers as strategic users of gas to remove the gap between what manufacturers and electricity generation companies pay per cubic foot of gas.

He said, “In 2026, there must be the introduction of a stable, transparent gas pricing framework for manufacturers and local gas supply must be prioritised before exports. Government must establish 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 MSME performance.

“Government must create a National Manufacturing Regulatory Coordination Desk (NMRCD) under the Federal Ministry of Industry, Trade and Investment to harmonise approvals, inspections and compliance processes for manufacturers across key agencies.

“We also call for the approval of the N1 trillion stabilisation fund for manufacturers and direct the CBN to increase the capital base of the Bank of Industry to meet the credit demand of industries.” NAN