Yemisi Izuora
The Manufacturers Association of Nigeria (MAN) has said that ongoing economic reforms by President Bola Tinubu, is bitting them off and creating more operational difficulties.
Accordingly, those reforms have significantly increased their operating costs pushing expenditure on alternative energy to N1.34tn in 2025 and worsening industrial performance.
According to the Association the reforms have laid the foundation for long-term economic restructuring and urged the Federal Government to shift its focus towards industrial recovery and growth.
In a document assessing the impact of recent economic reforms on industrial performance the MAN said manufacturers had borne a disproportionate share of the adjustment burden arising from the implementation of key policies, including fuel subsidy removal, exchange rate liberalisation, electricity tariff adjustments and tight monetary policy.
Director-General of MAN, Segun Ajayi-Kadir, explained that the reforms significantly altered the operating environment for manufacturers and triggered unprecedented increases in production costs.
The MAN, noted that the removal of fuel subsidy in May 2023 caused logistics and distribution costs to rise by more than 300 per cent within weeks, while the increase in electricity tariffs for Band A consumers further compounded production challenges.
“Although these measures were designed to stabilise the macroeconomy and restore investor confidence, they simultaneously triggered unprecedented increases in production costs across the industrial sector,” Ajayi-Kadir stated.
It noted that despite the sharp increase in electricity tariffs from about N68 per kilowatt-hour to between N209 and N225 per kilowatt-hour, power supply remained unstable due to persistent grid failures and system disruptions.
The Association said manufacturers consequently relied heavily on diesel, gas and premium motor spirit to keep their operations running.
“As a result, manufacturers continued to rely heavily on alternative energy sources such as diesel, gas and premium motor spirit to sustain operations. Expenditure on alternative energy surged from N781.68bn in 2023 to N1.11tn in 2024 and further increased to N1.34tn in 2025,” Ajayi-Kadir stated.
MAN added that the rising energy burden weakened industrial competitiveness and contributed to a decline in manufacturing capacity utilisation.
“This development severely weakened industrial competitiveness and contributed to declining manufacturing capacity utilisation, which dropped from 61.3 per cent in the first half of 2025 to 57.7 per cent in the second half of the same year,” Ajayi-Kadir stated.
It further disclosed that the worsening operating environment contributed to significant job losses, with more than 18,900 jobs affected during the review period.
On foreign exchange reforms, MAN said the liberalisation of the forex market produced mixed outcomes. While exchange rate unification improved transparency, the rapid depreciation of the naira sharply increased the cost of imported industrial inputs.
The association said the exchange rate rose from about N463/$ in June 2023 to N899/$ by December 2023 and later to approximately N1,535/$ by December 2024.
As a result, the cost of imported raw materials increased from N3.04tn in 2023 to N6.64tn in 2024, representing a rise of about 118 per cent.
MAN also revealed that manufacturing value added fell sharply from $45.2bn in 2023 to $21.84bn in 2024, while inadequate access to foreign exchange at the official market remained a major challenge for manufacturers.
The association further blamed high interest rates for constraining industrial expansion, noting that prime lending rates averaged 24.4 per cent as of March 2026, while maximum lending rates climbed to 33.8 per cent in some commercial banks.
“Under such conditions, long-term industrial investment became increasingly difficult and commercially unattractive,” Ajayi-Kadir stated.
According to MAN, credit to the manufacturing sector declined from N10.88tn in February 2024 to N6.6tn by December 2025.
Despite the challenges, the association commended some recent government initiatives, including the Naira-for-Crude programme, tax incentives for pharmaceutical manufacturers, the 2025 Tax Reform Act, the Nigeria Industrial Policy, the Nigeria First framework and the National Single Window platform.
MAN said these measures could support industrial recovery if properly implemented. “Overall, MAN believes that the reforms undertaken over the past three years have laid the groundwork for long-term economic restructuring. However, macroeconomic stabilisation must now transition into industrial recovery and growth,” Ajayi-Kadir stated.
The Manufacturers urged the Federal Government to provide affordable foreign exchange for productive activities, concessionary financing for industrial investments, stable electricity supply and predictable trade policies.
“Nigeria cannot achieve sustainable economic prosperity without a strong manufacturing base. The country’s long-term resilience depends on its capacity to produce competitively, create jobs locally and expand industrial value addition,” Ajayi-Kadir stated.