•Effective execution of new tax laws incentives critical —MAN
•Macro-economic stability key to sustained growth — Onafowokan
•Cautious optimism on economic outlook —CPPE
•Year of reaping benefits of reform —LCCI
By Yinka Kolawole
Nigeria’s manufacturing sector stands at a critical crossroads as industry stakeholders project improved performance in 2026, following a modest recovery in the second half of 2025. While recent gains have raised expectations of a stronger growth trajectory, experts caution that the sector’s ability to transition from recovery to sustained expansion will depend largely on policy consistency and effective implementation of ongoing economic reforms.
The cautiously optimistic outlook is anchored on continued macroeconomic stability, improved execution of incentives under the new tax laws scheduled to take effect from January 1, favourable oil price dynamics, rising foreign capital inflows, stable energy costs, and the timely implementation of key industrial and fiscal policies aimed at strengthening domestic production.
Effective execution of new tax laws and incentives critical – MAN
In his projection, Director of Research and Economic Policy Division, Manufacturers Association of Nigeria (MAN), Dr Oluwasegun Osidipe, said the sector is expected to record 3.1 percent real growth and a contribution of 10.2 percent to the real gross domestic product (GDP) in the coming year.
He however hinged the expected improved performance on the effective execution of incentives under the new tax laws.
On the requisite conditions to achieve the improved outlook, Osidipe said: “The naira is projected to appreciate further to N1,300–N1,400/$, driven by global oil price recovery, stronger external reserves, robust export earnings, increased foreign investments and remittance inflows.
“Headline inflation will decelerate further to 14%, supported by easing food prices, stable energy prices and appreciation of the naira.
“The Central Bank of Nigeria (CBN) is anticipated to implement further cuts in the benchmark interest rate to about 23%, in line with the disinflationary trend and to stimulate credit expansion and output growth.
“Further reduction in lending rates and completion of the bank recapitalisation exercise will enhance credit availability to manufacturers, strengthening investment and capacity utilisation.
“Real growth is projected to reach 3.1 percent while contribution to real GDP is expected to rise to 10.2 percent. These gains, however, hinge on the effective execution of incentives under the new tax laws, the operationalisation of the National Single Window (NSW) Project and the purposeful implementation of the Nigeria Industrial Policy in close alignment with the “Nigeria First” Policy framework,” he stated.
According to him, manufacturers had over the years struggled under multiple taxation, which hindered growth.
“You could not move your goods through the 774 local governments without paying for something, whether it’s for loading or offloading goods. But under the new tax law, the majority of those taxes are gone.”
He added that the government’s move to remove redundant levies and introduce targeted tax incentives for small and medium industries would help boost liquidity for manufacturers and enable them to reinvest in production.
He noted that the extension of government stimulus packages, such as access to single-digit interest loans under the N75 billion industrial support fund helped to boost to 61.3 per cent in the first half of 2025 from 57.6 per cent in the second half of 2024.
“When loans that used to attract 32 to 35 per cent interest are now available at single-digit rates, more manufacturers will have access to credit, produce more, employ more, and sell more. So, there’s no doubt, ultimately, output will grow,” he stated.
Osidipe stressed that government patronage would further accelerate growth, citing the example of Cross River State, which had committed to sourcing its automobile needs from local manufacturers.
“We are hoping that other state governments will follow suit. Once the government, as the largest spender, upscales patronage, it will ramp up production and impact the manufacturing industry,” he added.
Macroeconomic stability key to sustained growth —Onafowokan
Speaking in the same vein, the Managing Director of Coleman Technical Industries Limited, George Onafowokan, envisaged sustained growth in the manufacturing sector in 2026 based on the relative current macroeconomic stability.
Onafowokan, who is also the chairman of the Ogun State branch of MAN, based his optimistic outlook on a steadier naira and a downward trend in inflation.
According to him, the current economic growth rate, hovering between 3.4 and 3.9 per cent, provides a solid foundation for manufacturers to scale their operations in the coming year.
He described 2025 as a period of recovery, during which the sector found its footing despite significant headwinds.
“For the manufacturing sector, it’s been a stable year. We are seeing stability in the naira, inflation trending downwards and economic growth heading towards four percent. That stability is a good thing for manufacturers,” he stated.
Onafowokan however warned that the full potential of 2026 hinged on the willingness of the federal government to finalise and sign key fiscal policy measures that have remained pending since 2023.
In addition, he also identified the 2026 budget’s focus on capital expenditure, infrastructure, and security as drivers of his positive projections.
“If the government aligned its fiscal policies with the current macroeconomic stability, 2026 would mark the era where Nigerians finally experience the tangible benefits of ongoing economic reforms.
“Our prayer is that 2026 will be the year our hope is realised, when Nigerians begin to truly see the benefits of these reforms,” he added.
Cautious optimism on economic outlook —CPPE
On his part, CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said that the 2026 economic outlook is that of cautious optimism.
With reform momentum sustained, Nigeria is expected to transition more decisively from stabilisation to growth. GDP growth is projected between 4.0 and 4.5 percent, supported by continued moderation in inflation and stronger non-oil sector performance.
Moderating inflation should strengthen domestic demand and create room for gradual monetary easing, potentially lowering interest rates and stimulating private investment.
He however warned that despite the improving trajectory, several downside risks persist:
His words: “Insecurity continues to constrain agriculture, logistics and investment. Fiscal performance remains sensitive to oil shocks. High power, energy and logistics costs will continue to weigh on real-sector productivity.
“Debt service, estimated at over N15 trillion in the 2026 appropriation (about 50 percent of projected revenue), continues to constrain fiscal space.
“Geopolitical tensions could affect trade flows, commodity prices and capital movements.
“Fiscal and political uncertainties in the pre-election year could heighten risks; and Emerging resistance to tax reforms may undermine tax revenue expectations for 2026.”
Yusuf concluded that, “Overall, 2025 laid a solid foundation of macroeconomic stability. The outlook for 2026 is reassuring, with expectations of stronger growth, easing inflation, improving investor confidence and a gradual shift toward more inclusive expansion.
“If reform momentum is sustained and security challenges are effectively addressed, 2026 could mark the beginning of a more robust growth phase with tangible improvements in living standards.”
Year of reaping benefits of reform —LCCI
President of the Lagos Chamber of Commerce and Industry (LCCI), Engr. Leye Kupoluyi, said that 2026 can be the year that businesses will feel the benefits of reforms.
He stated: “LCCI believes that 2025 represented a turning point, from crisis management to cautious stabilization.
“The challenge for 2026 is to move beyond stability and translate macroeconomic reforms into broad-based prosperity.
“A particular area of focus should be the intentional effort towards boosting credit to the private sector through the banks, even as we expect to see more rates easing by the Central Bank of Nigeria.
“With disciplined policy execution, enhanced security, infrastructure expansion, and a strong focus on inclusivity, Nigeria can make 2026 the year when the benefits of reform are finally felt by businesses and households alike.”
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