Nigeria’s Manufacturing Sector Faces Cost Pressures Despite Slight Inflation Drop, Says MAN DG

The Manufacturers Association of Nigeria (MAN) has highlighted the persistent structural challenges faced by the country’s manufacturing sector, even as recent inflation figures indicate a marginal decline.

According to the Director General, Segun Ajayi-Kadir in a statement issued by the association, the inflation rate for August 2026 eased slightly to 15.39%, down from 15.43% in July 2026. While this modest reduction is viewed as a positive omen, he emphasises that the improvement remains fragile and does not necessarily translate into lower production costs for manufacturers.

Segun Ajayi-Kadir stated, “Manufacturers continue to operate in an environment characterised by high energy costs, logistics challenges, exchange rate costs, elevated raw-material prices and multiple fiscal and regulatory charges.” He further explained that, “Manufacturers cannot always transfer the full increase in production costs to consumers because purchasing power remains weak; therefore, margins remain under pressure while working capital requirements remain high.”

Despite the slight easing of inflation, the MAN DG warned that capacity utilisation may remain constrained, and local products could face reduced competitiveness. “High domestic production costs make it more difficult for Nigerian manufacturers to compete with imported products, particularly where imported goods enter the market at lower costs,” he noted.

Segun Ajayi-Kadir stressed the importance of targeted policy measures, urging the government to focus on reducing energy and logistics costs. “Manufacturers require an environment where they can access affordable energy, finance, foreign exchange, and logistics, while sourcing a greater proportion of their inputs locally,” he said. He called for immediate policy actions, including measures to lower energy costs, improve transport infrastructure, and streamline taxation to foster a resilient manufacturing sector.

He concluded, “Sustainable economic growth requires more than a gradual decline in the headline inflation rate. Nigeria needs an environment in which manufacturers can produce more, at lower cost, with greater investment, higher employment and stronger competitiveness.”

This call for comprehensive structural reforms underscores the urgent need for coordinated efforts to bolster Nigeria’s manufacturing industry and ensure its long-term sustainability and global competitiveness.