Manufacturers Seek Collaborative Solutions As Reforms Push Energy Costs To N1.34trn

The Manufacturers Association of Nigeria (MAN) has called for collaborative solutions with the government after highlighting severe operational challenges following three years of economic reforms.

The director/general of MAN Segun Ajayi-Kadir noted that “while reforms were necessary to correct structural distortions, manufacturers bore a disproportionate adjustment burden.

“Alternative energy spending jumped from N781.68 billion in 2023 to N1.34 trillion in 2025 due to subsidy removal and unstable power, pushing capacity utilisation down to 57.7per cent in H2 2025 and costing over 18,900 jobs.

He noted that the combination of fuel subsidy removal, exchange rate liberalisation, electricity tariff adjustments, and tighter monetary policy has significantly altered the operating landscape.

“Although these measures are essential for stabilising the macro-economy and restoring investor confidence, they have resulted in unforeseen increases in production costs across the industrial sector,” MAN stated.
Ajayi-Kadir noted that “the liberalisation of the foreign exchange market has yielded diverse outcomes. While the unification of exchange rate windows has enhanced transparency, the rapid depreciation of the naira has significantly elevated the cost of imported industrial inputs, underscoring the need for strategies to mitigate this impact.”
He added that “the cost of imported raw materials increased notably, from N3.04 trillion in 2023 to N6.64 trillion in 2024. Alongside this, manufacturing value-added declined, and although the introduction of the Electronic Foreign Exchange Matching System has improved market transparency, manufacturers continue to face challenges in accessing foreign exchange.
“The tight monetary policy environment has further complicated matters. Measures aimed at controlling inflation have resulted in higher borrowing costs, making long-term investment in the manufacturing sector increasingly challenging. With prime lending rates averaging 24.4 per cent and maximum lending rates reaching up to 33.8 per cent, there is a clear need for supportive measures that can ease financing hurdles.”
MAN DG explained that fluctuations in import duty assessments tied to exchange rate volatility have created uncertainty for manufacturers, saying that this unpredictability complicates business planning and contributes to inflationary pressures on domestically produced goods.
In light of these challenges, MAN advocated for a collaborative approach between the government and the manufacturing sector to devise practical solutions that facilitate sustainable growth, enhance competitiveness, and ensure a resilient industrial landscape for Nigeria.