MAN Decry Sluggish Recovery in Manufacturing, Credit to Sector Declines to N7.72trn
Arthur Eriye
The Manufacturers Association of Nigeria (MAN) has expressed concerns regarding a 9.5 per cent decline in credit extended to the manufacturing sector, which has dropped to N7.72 trillion as of March 2025, down from N8.53 trillion in December 2024.
The association cautioned that the sector’s fragile recovery could be jeopardised without immediate policy interventions.
Presenting its Third Quarter 2025 Manufacturers CEO’s Confidence Index (MCCI) report in Lagos, MAN indicated that limited access to credit, elevated energy costs, and a scarcity of foreign exchange continue to significantly impact the performance of Nigeria’s real sector, despite some modest signs of recovery.
The Director General of MAN, Segun Ajayi-Kadir, stated that manufacturers are still facing challenges in remaining viable amid difficult business conditions. “High lending rates averaging 36.6 percent, a decline in credit access to N7.72 trillion, and an increase in unsold inventories amounting to N1.04 trillion are all factors that continue to restrict manufacturing performance,” he remarked.
Ajayi-Kadir pointed out that although capacity utilisation has improved to 61.3 per cent in the first half of 2025, compared to 57.6 per cent in the second half of 2024, stressing, “These improvements are modest and could easily diminish without focused interventions. The manufacturing sector is starting to regain its stability after a prolonged period of instability. However, this recovery is delicate and could quickly reverse if we do not receive intentional, industry-supportive interventions.”
He called on the federal government to implement strategies that would lower energy costs, enhance foreign exchange liquidity, and broaden access to affordable credit to promote industrial growth.
The report indicated a significant decline in manufacturing value added, which dropped sharply to $25.36 billion in 2024 from $55.9 billion in 2023. This decline reflects the effects of exchange rate fluctuations, elevated inflation, and increasing interest rates. Nevertheless, despite these challenges, manufactured exports rose to N803.8 billion in the second quarter of 2025, an increase from N294.4 billion in the first quarter, showcasing some resilience within the export sector.
However, the industry continued to face considerable job losses. MAN reported that 18,935 jobs were lost in the first half of 2025, in contrast to 10,891 in the latter half of 2024, as manufacturers grappled with escalating input costs and restricted access to foreign exchange.
Although the Manufacturing Confidence Index (MCCI) experienced a slight increase from 50.3 points in Q2 2025 to 50.7 points in Q3 2025, this improvement was not enough to elevate overall business confidence above the critical 50-point mark.
Ajayi-Kadir remarked, “The 0.4-point increase in the MCCI represents the second consecutive quarterly rise, indicating cautious optimism among manufacturers. However, all current indices remain below 50 points, highlighting that the fundamental challenges continue to exist.”
He attributed the slight improvement to a more stable exchange rate and a gradual trend towards disinflation but cautioned that high energy costs and interruptions in gas supply continued to impede production across various subsectors.
MAN President, Francis Meshioye, characterised the modest recovery as a sign of advancement but emphasized that ongoing “binding constraints” require immediate attention. “The manufacturing sector is slowly progressing towards recovery, as evidenced by the consistent rise in the index. However, the top five manufacturing challenges identified in the report necessitate urgent government intervention to maintain this positive trend,” he stated.
Meshioye advocated for an industrial policy led by the private sector, grounded in the proposed Nigeria First Policy and the upcoming National Industrial Policy, to ensure that government objectives align with industrial realities.
He also called on the Central Bank of Nigeria to further its recent interest rate reductions. “The moment has arrived for the central bank to implement a more significant reduction that can effectively decrease the cost of credit and encourage investment in the real sector. Growth cannot flourish where capital remains excessively costly,” he stated.
The report indicated that six manufacturing sectors—Plastics & Rubber, Electrical & Electronics, Food & Beverages, Chemical & Pharmaceuticals, Textile & Footwear, and Basic Metal & Steel—experienced improvements due to the sourcing of local raw materials, a stable supply of polypropylene, and alleviated foreign exchange pressures.
Conversely, four sectors faced declines attributed to elevated energy costs, disruptions in gas supply, illegal logging, insufficient government support, and heightened competition from imports.
Ajayi-Kadir stressed that maintaining the current recovery necessitates coordinated fiscal and monetary policy actions. “Currency stability transcends a mere macroeconomic indicator; it embodies the national determination. To preserve the achievements of stabilization and foster prosperity, Nigeria must position manufacturing at the core of its growth strategy,” he remarked. The Director of the MAN Research and Economic Policy Division, Dr. Oluwasegun Osidipe, who presented the MAN Think Tank report in conjunction with the MCCI, urged the government to expedite the implementation of industrial policies, enhance pipeline security to increase oil production, broaden local refining capabilities, and enforce strict tax administration in anticipation of the tax reforms scheduled for January 2026. The association concluded that only decisive and sustained policy measures could convert the manufacturing sector into a genuine catalyst for Nigeria’s economic recovery.
