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Naira-for-Crude, Tax Reforms Can Revive Industries — MAN

The Manufacturers Association of Nigeria (MAN) has said that recent government interventions, including the Naira-for-Crude initiative, the Nigeria Industrial Policy, withholding tax exemptions, expanded VAT deductibility on fixed assets and services, phased reductions in Companies Income Tax, tax incentives for research and development, and fiscal relief measures for small and medium industries, could revive the manufacturing sector if properly implemented.

The group noted that manufacturers had borne the brunt of economic reforms introduced over the past three years, which led to soaring production costs, declining capacity utilisation, reduced access to credit and significant job losses.

In the organisation’s recent three-year government assessment document, MAN Director-General Segun Ajayi-Kadir stated that the reforms had laid the foundation for long-term economic restructuring but stressed that implementation must now focus on industrial recovery and growth.

Ajayi-Kadir stated, “The Nigeria Industrial Policy and the renewed emphasis on local content procurement through the Nigeria First framework equally represent important steps toward strengthening domestic industrial capacity. If properly implemented and consistently enforced across all government institutions, these initiatives could significantly improve market access for locally manufactured goods, deepen local value addition and stimulate industrial expansion.”

MAN’s DG noted that the implementation of the Naira-for-Crude initiative had reduced foreign exchange pressure within the downstream petrochemical and plastics value chain, while fiscal measures that zero-rated VAT and excise duties on pharmaceutical raw materials and medical devices had provided relief for local manufacturers.

He added that the 2025 Tax Reform Act introduced key provisions capable of improving the industrial climate, including withholding tax exemptions, expanded VAT deductibility on fixed assets and services, phased reductions in Companies Income Tax, incentives for research and development, and fiscal relief for small and medium-scale industries.

The MAN boss also stated that the ongoing harmonisation of levies across states could help reduce the burden of multiple taxation, while the National Single Window platform offers an opportunity to simplify trade procedures and improve supply chain efficiency.

Despite the positive outlook, MAN said manufacturers faced severe challenges following the removal of fuel subsidies, exchange rate liberalisation, electricity tariff increases and tight monetary policies.

Ajayi-Kadir said the removal of the fuel subsidy in May 2023 caused logistics and distribution costs to surge by more than 300 per cent within weeks, while electricity tariffs for Band A consumers rose from about N68 per kilowatt-hour to between N209 and N225 per kilowatt-hour.

He said manufacturers continued to rely heavily on alternative energy sources because the electricity supply remained stable, noting that expenditure on alternative energy rose from N781.68bn in 2023 to N1.11tn in 2024 and further increased to N1.34tn in 2025.

The association disclosed that manufacturing capacity utilisation declined from 61.3 per cent in the first half of 2025 to 57.7 per cent in the second half, while more than 18,900 jobs were affected during the period under review.

Ajayi-Kadir also said exchange rate liberalisation increased the cost of imported industrial inputs, with the naira depreciating from about N463 to the dollar in June 2023 to N899 by December 2023 and later to approximately N1,535 by December 2024.

He said, “Consequently, the cost of imported raw materials rose from N3.04tn in 2023 to N6.64tn in 2024, representing an increase of about 118 per cent. Manufacturing value-added also declined significantly from $45.2bn in 2023 to $21.84bn in 2024.”

The association further stated that inadequate access to foreign exchange at the official market remained a challenge, with less than half of industrial demand currently being met.

MAN added that high interest rates had constrained industrial expansion, noting that prime lending rates averaged 24.4 per cent as of March 2026, while maximum lending rates reached 33.8 per cent in several commercial banks.

According to Ajayi-Kadir, credit to the manufacturing sector fell from N10.88tn in February 2024 to N6.6tn by December 2025, adding that manufacturers also grappled with fluctuating customs duty assessments linked to exchange rate volatility, making business planning and pricing difficult.

The association urged the Federal Government to prioritise affordable access to foreign exchange for productive activities, concessionary financing for industrial investment, stable electricity supply and predictable trade policies.

Ajayi-Kadir said, “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.

“The current reforms can still deliver meaningful industrial transformation if implementation becomes more coordinated, more responsive to productive sectors and more focused on reducing the structural constraints limiting manufacturing performance.”

MAN’s position is reinforced by the recent African conversation about manufacturing as a national security policy.

In her contribution to The Boardroom Africa 2026 Industry Report, Founder and Managing Director, Senvoice, Marième Doukouré-Amoa, observed that African markets’ tightening of mining codes and local content oversight reflect “a shift away from passive participation in global value chains toward embedding resilience and domestic industrial capacity.”

She noted that “trade and supply chain norms have been fundamentally disrupted, exposing the fragility of systems built on uninterrupted material flows and stable processing capacity.”

Doukouré-Amoa explained that as globalisation faces structural strain, Industrial, manufacturing, and metals strategies are being recalibrated around supply security, regional processing, and long-term value retention.