Rising global tensions are beginning to affect Nigeria’s industrial sector as the US-Iran conflict impact drives up energy and logistics costs, prompting the Manufacturers Association of Nigeria to outline urgent measures to protect local producers.
The group warned that the situation poses immediate risks to production stability and growth projections.
Concerns over the US-Iran conflict impact emerged as global crude oil prices reacted to geopolitical tensions in the Middle East, triggering a chain effect on fuel costs and industrial inputs.
Manufacturers in Nigeria rely heavily on diesel and gas to power operations, making them highly vulnerable to fluctuations in global energy markets.
According to industry stakeholders, these dependencies expose the sector to external shocks beyond domestic control.
The Manufacturers Association of Nigeria noted that the sector had projected a 3.1 percent real growth for 2026, but warned that this outlook is now under threat due to rising operational costs linked to the ongoing crisis.
Director-General of MAN, Segun Ajayi-Kadir, stated that the US-Iran conflict impact is already being felt across production lines, with escalating energy costs significantly affecting manufacturers.
He said:
“Energy cost escalation is biting hard. Many manufacturers are seeing their margins wiped out almost overnight.”
The association explained that rising global oil prices have increased domestic pump prices, leading to higher expenses for diesel and other energy sources critical to manufacturing processes.
Beyond energy, the US-Iran conflict impact has also affected supply chains. MAN highlighted that imported inflation, increased freight charges, and extended shipping timelines are making it more expensive to import raw materials.
Ajayi-Kadir added:
“Production costs are rising sharply, while consumer purchasing power is weakening.”
He warned that manufacturers are facing a dual challenge of rising production costs and declining demand, which has resulted in unsold inventories across the sector.
To address the growing US-Iran conflict impact, the association proposed a series of policy interventions aimed at cushioning the sector.
Key recommendations include:
- Fast-tracking the Presidential Compressed Natural Gas (CNG) initiative for industrial clusters to reduce dependence on diesel
- Creating a dedicated foreign exchange window through the Central Bank of Nigeria for importing critical inputs
- Ensuring local refineries prioritise supply to domestic manufacturers at competitive rates
- Suspending multiple taxation and logistics levies on haulage operations
These measures, according to MAN, are necessary to stabilise production costs and sustain manufacturing output amid external pressures.
The US-Iran conflict impact highlights Nigeria’s exposure to global economic shocks, particularly due to reliance on imported inputs and energy sources.
Industry experts warn that failure to respond promptly could lead to factory shutdowns, job losses, and setbacks in Nigeria’s industrialisation drive.
The situation also underscores the importance of strengthening local supply chains and reducing dependence on external markets.
Analysts note that building resilience within the manufacturing sector could help mitigate similar disruptions in the future.
