Nigeria’s manufacturing sector is expected to experience a moderate recovery in 2026, with a projected real growth rate of 3.1 percent and a contribution to real GDP of 10.2 percent. This is according to the Manufacturers Association of Nigeria (MAN) and the Centre for the Promotion of Private Enterprise (CPPE), which attribute the anticipated improvement to the effective implementation of new tax laws, the operationalization of the National Single Window Project, and the purposeful execution of the Nigeria Industrial Policy.
The sector’s growth is expected to be driven by an appreciation of the naira, which is projected to reach between N1,300 and N1,400 to the dollar, supported by a recovery in global oil prices and improved export earnings. Inflation is also expected to moderate to 14 percent in 2026, driven by easing food prices and stable energy costs.
The Central Bank of Nigeria is anticipated to adopt a more accommodative monetary stance, cutting the Monetary Policy Rate to around 23 percent to stimulate credit expansion and output growth. This, combined with lower lending rates and the completion of the banking sector recapitalization exercise, is expected to improve access to credit for manufacturers, strengthen investment, and boost capacity utilization.
The CPPE has also highlighted the need for the government to address deep-seated structural constraints, including high energy and logistics costs, expensive and short-tenured financing, and unmanaged import competition. The organization has called on the government to prioritize macroeconomic stability, maintain foreign exchange market reforms, and avoid disruptive policy reversals.
To support the manufacturing sector’s growth, the CPPE has recommended that the government fix the power sector value chain, provide lower-cost funds with longer tenors suited for manufacturing, and implement smart trade and protection policies that protect domestic manufacturers without harming consumer welfare.
The effective implementation of reforms in power, trade, and development finance is expected to significantly enhance the sector’s growth prospects and competitiveness. With the government’s support, Nigeria’s manufacturing sector is poised to experience a modest recovery in 2026, driven by improved macroeconomic fundamentals and targeted policy interventions. The sector’s growth is critical to the country’s economic development, and its recovery is likely to have a positive impact on the broader economy.