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 of 10.2 percent to real GDP. This outlook comes from the Manufacturers Association of Nigeria (MAN) and the Centre for the Promotion of Private Enterprise (CPPE), who attribute the anticipated improvement to the effective implementation of new tax laws, the operationalisation of the National Single Window Project, and the purposeful execution of the Nigeria Industrial Policy.
The sector’s growth is likely to be driven by an appreciation of the naira, projected to reach between N1,300 and N1,400 per dollar, supported by a recovery in global oil prices and improved export earnings. Inflation is expected to moderate to 14 percent in 2026, aided 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. Combined with lower lending rates and the completion of the banking sector recapitalisation exercise, these measures should improve manufacturers’ access to credit, strengthen investment, and boost capacity utilisation.
The CPPE has highlighted the need for the government to address deep‑seated structural constraints, including high energy and logistics costs, expensive short‑tenured financing, and unmanaged import competition. It calls on the government to prioritise macroeconomic stability, maintain foreign‑exchange market reforms, and avoid disruptive policy reversals. To support manufacturing growth, the CPPE recommends fixing the power‑sector value chain, providing lower‑cost funds with longer tenors suited to manufacturers, and implementing smart trade and protection policies that safeguard domestic producers without harming consumer welfare.
Effective implementation of reforms in power, trade, and development finance is expected to significantly enhance the sector’s growth prospects and competitiveness. With government support, Nigeria’s manufacturing sector is poised for a modest recovery in 2026, driven by improved macroeconomic fundamentals and targeted policy interventions. This recovery is critical to the country’s economic development and is likely to have a positive impact on the broader economy.
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