The Manufacturers Association of Nigeria (MAN) have described the past three years as a period of difficult but consequential economic transition.
They noted that the President Bola Tinubu’s administration embarked on substantive macroeconomic reforms intended to correct long-standing structural distortions within the economy and reposition the country for sustainable growth.
While MAN acknowledged the necessity of these reforms and commended the government’s resolve to confront entrenched economic inefficiencies, manufacturers have also borne a disproportionate share of the adjustment burden arising from the implementation and sequencing of these policies.
These were and more were contained in a statement signed on behalf of MAN by its Director General, Segun Ajayi-Kadir.
They further claimed that the combined impact of fuel subsidy removal, exchange rate liberalization, electricity tariff adjustments and tight monetary policy significantly altered the operating environment for manufacturers.
“Although these measures were designed to stabilize the macro-economy and restore investor confidence, they simultaneously triggered unprecedented increases in production costs across the industrial sector,” MAN added.
“The immediate removal of fuel subsidy in May 2023 caused logistics and distribution costs to rise by over 300 percent within weeks. This pressure intensified further following the adjustment of electricity tariffs for Band A consumers from about ₦68 per kilowatt-hour to between ₦209 and ₦225 per kilowatt-hour.
“However, despite the significant tariff increase, electricity supply remained unstable due to persistent grid failures and system disruptions.”
As a result of these shortcomings, they argued that manufacturers continued to rely heavily on alternative energy sources such as diesel, gas and premium motor spirit to sustain operations.
Expenditure on alternative energy, MAN stated, surged from ₦781.68 billion in 2023 to ₦1.11 trillion in 2024 and further increased to ₦1.34 trillion in 2025.
“This development severely weakened industrial competitiveness and contributed to declining manufacturing capacity utilization, which dropped from 61.3 percent in the first half of 2025 to 57.7 percent in the second half of the same year.
“The rising operational burden also contributed to significant job losses across the sector, with over 18,900 jobs affected during the review period.”
The liberalization of the foreign exchange market, MAN explained also produced mixed outcomes for manufacturers. While the unification of exchange rate windows sought to improve transparency and eliminate market distortions, the rapid depreciation of the naira sharply increased the cost of imported industrial inputs.
“The exchange rate moved from about ₦463 to the dollar in June 2023 to ₦899 by December 2023 and later to approximately ₦1,535 by December 2024.
“Consequently, the cost of imported raw materials rose from ₦3.04 trillion in 2023 to ₦6.64 trillion in 2024, representing an increase of about 118 percent.
“Manufacturing value-added also declined significantly from $45.2 billion in 2023 to $21.84 billion in 2024. Although the introduction of the Electronic Foreign Exchange Matching System improved transparency within the market, manufacturers still face inadequate access to foreign exchange at the official window, where less than half of industrial demand is currently met.
“The tight monetary policy environment further constrained industrial expansion. In response to inflationary pressures, monetary authorities implemented multiple increases in the Monetary Policy Rate between 2023 and 2024 and scaled back its direct credit intervention programmes. Although these measures aimed to stabilize prices and strengthen macroeconomic fundamentals, borrowing costs for manufacturers became excessively high.
“As of March 2026, prime lending rates averaged 24.4 percent, while maximum lending rates climbed to 33.8 percent in several commercial banks.
“Under such conditions, long-term industrial investment became increasingly difficult and commercially unattractive. Credit to the manufacturing sector consequently declined from ₦10.88 trillion in February 2024 to ₦6.6 trillion by December 2025.
“¹The sector also faced uncertainty arising from fluctuating import duty assessments linked directly to exchange rate volatility. Manufacturers that imported essential machinery and raw materials struggled to maintain predictable pricing structures because customs duty obligations changed frequently in line with foreign exchange movements. This development complicated business planning and further increased inflationary pressure on locally manufactured products.”
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