Nigeria’s manufacturing sector stands at a critical crossroads in 2026, with experts projecting improved performance for the year if key policy and economic conditions are sustained, stakeholders say.
While the industry showed modest recovery in the second half of 2025, its transition to sustained expansion hinges on consistent implementation of reforms, macroeconomic stability, and targeted government support.
Industry leaders emphasised that effective execution of incentives under the new tax laws, which took effect on January 1, 2026, will be vital to boosting output and competitiveness.
According to the Manufacturers Association of Nigeria (MAN), planned tax incentives and streamlined levies are expected to stimulate liquidity, enhance investment and support capacity utilisation among domestic producers, underpinning projected growth.
Dr Oluwasegun Osidipe, Director of Research and Economic Policy at MAN, said the sector could deliver 3.1 percent real growth and contribute 10.2 percent to real gross domestic product (GDP) in 2026, provided that manufacturers capitalise on improved fiscal conditions and policy incentives.
He noted that reduced multiple taxation and expanded access to affordable credit could strengthen investment and production.
Macroeconomic stability is another pillar experts highlight as essential. Industry figures said a more stable naira, moderating inflation and potential reductions in benchmark interest rates would enhance business confidence, reduce costs, and attract foreign investment into the sector.
Manufacturers say these conditions are necessary to sustain production and expand output in a competitive global environment.
However, analysts caution that several longstanding structural challenges could temper growth. High energy costs, infrastructure deficits and limited access to long-term financing remain barriers to efficiency and competitiveness.
Achieving a stable, cost-efficient energy environment and expanding credit availability at lower interest rates are frequently cited priorities for the industry to maximise investment and capacity use.
Beyond fiscal and monetary factors, experts also stress the need for policy alignment and implementation. Completing pending fiscal policy measures, operationalising industrial policy frameworks, and removing bureaucratic bottlenecks could amplify growth prospects and strengthen manufacturing’s contribution to national development.
Other industry voices anticipate that digital transformation, adoption of innovative technologies, and deeper engagement with global value chains will further enhance competitiveness.
Strategic integration of technology, including automation and energy-efficient practices, may lower production costs and improve output quality, making Nigerian products more attractive domestically and internationally.
Experts acknowledge that 2025 laid a foundation of modest recovery, but say 2026 presents a pivotal opportunity for manufacturing to shift from stabilisation to broader expansion.
Success in this transition will depend on consistent policy execution, sustained macroeconomic gains and targeted support to address structural constraints faced by manufacturers.
If these conditions are met, the sector could play a stronger role in job creation, export growth and value-added production, contributing to Nigeria’s broader economic objectives for 2026 and beyond.
