49% Of Manufacturers Not Getting Forex From Official Market – Association

Despite reforms, less than 50 per cent of Nigerian manufacturers’ foreign exchange requests were unmet through the official window in the third quarter of 2025.

According to the latest data in the Manufacturers Association of Nigeria (MAN)’s CEOs Confidence Index (MCCI), despite an improved rate of forex sourcing, less than 51 per cent of manufacturers’ forex demand was accessed at the official window.

The report noted that high exchange rates and limited liquidity were still major challenges for manufacturers in Africa’s most populous country.

Nigeria floated the naira in June 2023 to restore investor confidence and improve the country’s business environment. Since that bold move, companies no longer waste energy lobbying for scarce official foreign exchange allocations and can instead focus on improving productivity and competitiveness.

MAN has forecast that the Nigerian economy would grow by four per cent in 2026, owing to higher oil output and further improvement in fiscal space.

The manufacturers also raised the alarm on the country’s high lending rate of 37 per cent and job losses in the economy, despite their increased confidence in the economy.

According to them, the high interest rate makes it challenging for manufacturers to access affordable credit, invest in expansion and create new jobs.

The report said that the average lending rate for manufacturers remained at 37 per cent in the first nine months of the year despite the Central Bank of Nigeria’s (CBN) lower monetary policy rate (MPR).

The MCCI report shows that the Nigerian manufacturing sector recorded 18,935 job losses in the first half (H1) of 2025, up 74 per cent from the job losses the industry recorded in the second half (H2) of 2024.

“Though lower, the alternative energy cost of N676.6 billion and raw material import of N1.72 trillion in H1 2025 remain a heavy burden on operational cost and employment, with 18,935 job losses recorded in the same period,” the report said.

“Also, high average lending rates of 36.6 per cent, reduction in credit access to N7.72 trillion and rising unsold inventories of N1.04 trillion continue to limit performance,” the report noted.

“Overall, the sector’s fragile recovery calls for urgent policy actions to cut energy costs, strengthen FX liquidity and expand affordable credit access to accelerate growth,” it noted.

The aggregate MAN CEO’s Confidence Index also recorded a 0.4-point uptick to 50.7 in Q3 2025 from 50.3 points in the second quarter (Q2). However, real output growth dropped from 1.69 per cent to 1.6 per cent in Q2, contributing a modest 7.81 per cent to GDP, down from 9.62 per cent.

According to MAN’s Q3 report, current business conditions, employment, and production level indices improved due to the continuous disinflation trend and more stable exchange rate.

However, the report said the current production index declined owing to industrial disputes in the oil and gas sector, which disrupted gas supply, elevated energy costs, and constrained manufacturing output.

The projections for business conditions, employment conditions, and production levels in the next quarter improved by 1.8 points, 0.1 points, and 0.2 points, respectively.

The report attributed the increased projections for the three indices to the 50-basis-point cut in the benchmark interest rate, suspension of the four percent free-on-board levy, and introduction of tax incentives on local sourcing of raw materials.

It added that the expectation for the presidential assent, implementation of the 30 per cent value addition requirement on raw material exports, anticipation that the Nigeria First Policy and forthcoming industrial policy will be private sector–driven as part of the increased manufacturers’ optimism in their projections.

Segun Ajayi-Kadir, director general of MAN, said that despite the modest gains in the improved manufacturers’ confidence in the economy, all current indices remain below the 50-point threshold, indicating that the underlying challenges, particularly high inflation, exchange rates, and interest rates, continue to weigh on the sector.