By Paul Onehi
The Manufacturers Association of Nigeria (MAN) has reported that credit to the manufacturing sector declined by 9.5 per cent, falling to ₦7.72 trillion as of March 2025, compared to ₦8.53 trillion in December 2024.
The association described the development as a setback to the sector’s fragile recovery, emphasizing the urgent need for targeted policy interventions to stabilize and sustain growth within the industry.
The Manufacturers Association of Nigeria (MAN), in its Third Quarter 2025 Manufacturers CEO’s Confidence Index report released in Lagos on Tuesday, revealed that the decline in credit to the sector, persistent high energy costs, and foreign exchange liquidity challenges continue to weigh heavily on the performance of the real sector, despite modest improvements in output and business confidence.
According to MAN’s Director General, Segun Ajayi-Kadir, the sector’s resilience remains fragile as key constraints persist. He noted that high lending rates averaging 36.6 per cent, reduced credit access now at ₦7.72 trillion, and rising unsold inventories amounting to ₦1.04 trillion continue to hinder manufacturing performance and threaten the sector’s recovery momentum.
Ajayi-Kadir noted that while capacity utilisation in the manufacturing sector improved to 61.3 per cent in the first half of 2025, up from 57.6 per cent in the second half of 2024, the progress remained modest and precarious. He warned that these gains could be quickly eroded without decisive and coordinated policy action to address the underlying structural challenges confronting the industry.
“Our data indicate that the manufacturing sector is gradually regaining its footing after a prolonged period of turbulence,” Ajayi-Kadir said. “However, this recovery remains fragile and could easily stall without deliberate, industry-friendly policy interventions to support growth and strengthen the sector’s productive capacity.”
He urged the Federal Government to prioritise policies that would reduce energy costs, improve foreign exchange liquidity, and expand access to affordable credit in order to accelerate industrial growth and enhance competitiveness.
According to MAN, manufacturing value added declined sharply to $25.36 billion in 2024, down from $55.9 billion in 2023, reflecting the sector’s weakened competitiveness amid soaring exchange rates, inflation, and interest rates. However, the association noted a measure of resilience, as manufactured exports rose significantly to ₦803.8 billion in the second quarter of 2025, up from ₦294.4 billion in the first quarter, despite persistent macroeconomic headwinds.
The report further revealed that 18,935 jobs were lost in the first half of 2025, a sharp increase from 10,891 job losses recorded in the second half of 2024, as manufacturers continued to grapple with high input costs and foreign exchange scarcity.
MAN also noted that the Manufacturers CEO’s Confidence Index (MCCI) recorded a slight improvement, rising from 50.3 points in the second quarter of 2025 to 50.7 points in the third quarter.
However, the association stated that the increase was not sufficient to lift overall business conditions above the 50-point neutral threshold, which separates expansion from contraction.
Ajayi-Kadir explained that while the 0.4-point uptick in the MCCI is significant marking the second consecutive quarterly increase, it only signals a cautiously improving sentiment among manufacturers.
“All current indices remain below 50 points,” he said, “indicating that the underlying challenges confronting the sector persist and require urgent policy attention.”
Ajayi-Kadir attributed the slight improvement in the sector’s performance to a continuous disinflation trend and a more stable exchange rate, noting that these factors had provided some relief to manufacturers.
However, he cautioned that high energy costs and frequent disruptions in gas supply continued to constrain output across several subsectors, limiting the pace of recovery.
In his remarks, MAN President, Francis Meshioye, described the modest rebound as evidence of a gradual recovery in the manufacturing sector.
He, however, stressed that the industry still faced binding structural constraints that must be addressed urgently to sustain growth, enhance productivity, and strengthen the sector’s contribution to Nigeria’s economic development.
Meshioye said, “The manufacturing sector is gradually inching towards recovery, as seen in the consistent increase in the index in Q2 and Q3. However, the top five manufacturing challenges outlined in the report demand urgent government attention to sustain this trend.”
Meshioye emphasized the need for a private sector–driven industrial policy anchored on the proposed Nigeria First Policy and the forthcoming National Industrial Policy.
He noted that such a framework would help ensure better alignment between policy intentions and the realities of the industrial sector, fostering a more competitive, resilient, and inclusive manufacturing landscape.
The MAN chief also urged the Central Bank of Nigeria (CBN) to deepen its recent rate cut, emphasizing the need for more decisive monetary easing to support industrial recovery.
“The time has come for the apex bank to introduce a bolder reduction that can meaningfully lower the cost of credit and stimulate real sector investment,” Meshioye stated. “Growth cannot thrive where capital remains prohibitively expensive”.
The association highlighted notable improvements across six manufacturing groups—Plastics & Rubber, Electrical & Electronics, Food & Beverages, Chemical & Pharmaceuticals, Textile & Footwear, and Basic Metal & Steel.
According to MAN, these subsectors benefited from factors such as increased local raw material sourcing, a more stable supply of polypropylene, the expansion of fibre optic infrastructure, and a moderate easing of foreign exchange pressures, all of which contributed to the modest gains recorded during the period.
However, four other groups recorded declines due to high energy costs, gas supply disruptions, illegal logging, limited government patronage, and the influx of imported products.
Ajayi-Kadir concluded that sustaining the manufacturing sector’s fragile rebound would require coordinated fiscal and monetary policy actions aimed at fostering stability and stimulating industrial growth.
“Currency stability is more than a macroeconomic metric; it is a reflection of national resolve,” he said. “To secure the gains of stabilisation and accelerate prosperity, Nigeria must make manufacturing the nucleus of its growth strategy.”
Presenting the MAN Think Tank Report alongside the Manufacturers CEO’s Confidence Index (MCCI), the Director of MAN Research and Economic Policy Division, Dr. Oluwasegun Osidipe, called on the government to fast-track the implementation of key industrial policies, tighten pipeline security to boost oil output, expand local refining capacity, and ensure disciplined tax administration ahead of the January 2026 tax reforms.
He emphasised that such measures are critical to improving the business environment, strengthening investor confidence, and positioning the manufacturing sector as a central pillar of Nigeria’s economic transformation.
