Manufacturers and other real-sector operators are increasingly upbeat, noting that many of the deliberate and strategic reforms introduced to revive the struggling sector are now producing tangible results. The improved outlook is closely linked to enhanced macroeconomic stability driven by reform measures rolled out since May 29, 2023.

Key interventions — including the removal of fuel subsidies, exchange-rate unification, fiscal and tax reforms, the floating of the naira, trade facilitation measures, improved export processes, and the rebasing of Gross Domestic Product (GDP) — have reshaped the operating environment for manufacturers. The outcome has been relatively improved currency stability, moderating inflation, and steady economic growth, all of which have supported the sector’s gradual rebound that began last year.

The Managing Director and Chief Executive Officer of Coleman Technical Industries Limited, George Onafowokan, described 2025 as a year of relative stability for manufacturers. He noted that the naira stabilised, inflation trended downward, and economic growth hovered between 3.4 and 3.9 per cent, approaching four per cent. According to him, such stability provides a more predictable environment for manufacturing planning and investment.

A similar assessment was shared by the President of the Lagos Chamber of Commerce and Industry (LCCI), Engr. Leye Kupoluyi, who observed that the naira showed notable stability against the dollar and other major currencies in 2025, reflecting improved market confidence and stronger policy support. He pointed out that at the official foreign exchange window, the naira appreciated by over six per cent between December 2024 and December 2025, while the parallel market also recorded double-digit appreciation. The narrowing gap between official and parallel market rates, he said, signalled reduced arbitrage opportunities and better market alignment.

Kupoluyi added that exchange-rate stability was reinforced by rising external reserves, which climbed to $45.5 billion by the end of 2025. This, he explained, strengthened the Central Bank of Nigeria’s capacity to manage liquidity, stabilise the market, and cushion the economy against external shocks.

Further affirming the improving outlook, the Chief Executive Officer of the Nigeria Economic Summit Group (NESG), Dr. Tayo Aduloju, said the bold reforms of the past two years and eight months are beginning to yield measurable outcomes. In his 2026 Macroeconomic Outlook, he noted that Nigeria’s economy has moved away from crisis conditions towards greater stability, particularly in the foreign exchange market.

One of the clearest signs of progress, analysts say, is the sustained decline in inflation. In 2025, headline inflation moderated for eight consecutive months, falling to 14.45 per cent in November — its lowest level in over three years. This trend was driven by easing food prices, improved exchange-rate stability, favourable base effects, and tight monetary policy. The Central Bank maintained the Monetary Policy Rate at 27 per cent for most of the year to anchor inflation expectations.

Despite the disinflation trend, manufacturers caution that prices remain high. The President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, acknowledged that although inflation eased significantly in 2025, elevated price levels continued to erode consumers’ purchasing power and dampen demand. Nonetheless, he said the sector showed resilience, with capacity utilisation rising to 61.3 per cent and export performance strengthening. Manufacturing’s contribution to GDP also improved, while sectoral output recorded steady growth across the first three quarters of the year.

Aduloju highlighted foreign exchange reforms as a major turning point. Prior to mid-2023, Nigeria operated a heavily managed FX regime that masked underlying distortions and encouraged arbitrage. The unification of exchange rates and reduced market intervention initially caused disruptions but eventually led to improved price discovery, stronger forex inflows, and renewed investor confidence. Business sentiment indicators, including Purchasing Managers’ Indices, remained in expansion territory through most of 2024 and 2025.

Fuel subsidy removal has also played a critical role in stabilisation. Before its elimination, subsidy payments consumed vast public resources and constrained spending on infrastructure and social services. Since its removal, fiscal space has improved, fuel supply has become more predictable, and allocations to subnational governments have increased.

Another major boost has come from tax reforms. Even before the new Tax Act took effect in January 2026, manufacturers expressed optimism that the framework would reduce multiple taxation and ease compliance burdens. Central to the reform is tax harmonisation, which consolidates numerous federal tax laws into a unified statute and encourages states to follow suit. Small businesses with annual turnover of N100 million or less are now exempt from Companies Income Tax, while larger firms are set to benefit from a phased reduction in corporate tax rates.

The reforms also introduce targeted investment incentives, including a new Economic Development Incentive that provides tax credits for qualifying capital expenditure. Manufacturers can now recover input Value Added Tax on purchases, including services and fixed assets, improving cash flow and lowering production costs. The establishment of a Tax Ombud is expected to protect taxpayer rights and curb excessive regulatory charges.

Trade reforms have further strengthened the sector. Non-oil exports rose sharply in the first half of 2025, generating a significant trade surplus and supporting Nigeria’s diversification agenda. Improved logistics, export corridors, and market access initiatives have reduced costs and enhanced the competitiveness of Nigerian products across regional markets.

Electricity reform offers additional hope. The Electricity Act 2023 decentralised power generation, transmission, and distribution, empowering states to develop their own electricity markets and attract private investment. Manufacturers see this as a potential solution to chronic power shortages that have forced heavy reliance on costly alternative energy sources.

Industry leaders broadly agree that manufacturing is regaining momentum, supported by a renewed emphasis on local production, the Buy Made-in-Nigeria campaign, and incentives for domestic industries. These policies are helping to correct long-standing distortions that left the sector overly dependent on imports and vulnerable to global supply shocks.

The road to recovery, however, has been difficult. The early phase of reforms triggered sharp increases in living and production costs, currency depreciation, high interest rates, and inflation that peaked at historic levels in late 2024. Manufacturers struggled with rising energy prices, expensive imports, and limited access to foreign exchange, leading to reduced output and temporary shutdowns in some cases.

Despite these setbacks, signs of stabilisation are now emerging. Analysts stress that the next phase must focus on consolidating the fragile gains achieved so far. Sustained policy consistency, institutional discipline, and continued reform implementation will be critical to transforming the current recovery into resilient, inclusive growth capable of creating jobs, reducing poverty, and enhancing Nigeria’s global competitiveness.