Manufacturers’ confidence in Nigeria’s business environment rebounded in the second quarter of 2026 buoyed by expectations of improved government policies and a more favourable operating climate.
But the sector operators have continued to grapple with high borrowing costs, inadequate power supply, foreign exchange constraints and multiple taxation.
The latest Manufacturers CEO Confidence Index released by the Manufacturers Association of Nigeria, showed that the aggregate index rose to 52.1 points in Q2 2026, up from 48.7 points in the first quarter (Q1’26), indicating a return to positive business sentiment.
Director General of MAN, Segun Ajayi-Kadir, said the improvement reflected manufacturers’ optimism about the direction of government reforms rather than any significant improvement in current operating conditions.
He stated: “The increase in the MCCI to 52.1 points signals renewed confidence among manufacturers, driven largely by expectations that recent policy initiatives, including the Nigeria Industrial Policy, the ‘Nigeria First’ Policy, Executive Orders 003 and 005, and the Nigeria Tax Act 2025, will improve the operating environment.”
He, however, noted that the optimism remained fragile as manufacturers continued to face severe operational challenges.
“The confidence expressed by manufacturers is largely forward-looking. Actual business and employment conditions during the second quarter remained weak, with both indicators still below the 50-point threshold, reflecting subdued business activity,” Ajayi-Kadir stated.
He listed limited access to finance, persistent electricity shortages, high production costs, inadequate foreign exchange availability, weak consumer demand and multiple taxation as the major constraints confronting manufacturers.
Ajayi-Kadir said manufacturers remained dissatisfied with the high cost of bank credit, attributing it to the Central Bank of Nigeria’s Monetary Policy Rate, MPR, of 26.5 per cent.
“Commercial lending rates remain prohibitively high for manufacturers. The current monetary policy stance continues to constrain access to affordable financing needed for investment and expansion,” he said.
The MAN DG further expressed concern over continued regulatory bottlenecks and uncertainty surrounding the implementation of the Nigeria Tax Act 2025, saying manufacturers were yet to enjoy the full benefits of the reforms aimed at reducing multiple taxation and easing regulatory burdens.
Ajayi-Kadir added that although local sourcing of raw materials had improved, government ministries, departments and agencies were yet to substantially increase patronage of Made-in-Nigeria products as envisaged under the “Nigeria First” policy.
He urged the Federal Government to ensure strict compliance with the directive requiring MDAs to source at least 80 per cent of their procurement locally, while calling on the CBN to reduce the MPR to below 20 per cent and prioritise foreign exchange allocation to manufacturers to stimulate production and accelerate industrial growth.
