•Finance cost, energy crisis, FX top challenges in Q2

Manufacturers have called on the Central Bank of Nigeria (CBN) to urgently slash the monetary policy rate (MPR) to below 20 per cent, warning that crippling borrowing costs, worsening access to finance and persistent power shortage are threatening the sector’s recovery.

The Manufacturers Association of Nigeria (MAN), at the release of its Manufacturers’ CEOs Confidence Index (MCCI) for Q2 2026, said confidence among manufacturers improved to 52.1 points from 48.7 in Q1, marking a return to optimism after dipping below the benchmark level of 50.

However, the association’s Director-General, Segun Ajayi-Kadir, stressed that the improved sentiment was driven more by expectations of better business conditions in the coming months than by any actual improvements in the operating environment.

The report identified limited access to finance as the biggest challenge confronting manufacturers in the quarter, replacing multiple taxation.

Frequent power outages ranked second, followed by inadequate foreign exchange availability, high interest rates, low patronage of locally-made products and multiple taxation.

According to the DG, manufacturers remain extremely dissatisfied with commercial bank lending rates, arguing that the current MPR of 26.5 per cent has made credit prohibitively expensive and discouraged investment in production.

The report noted that manufacturers “bemoaned high interest rates on bank loans”, insisting that commercial banks were charging excessive lending rates because of the CBN’s tight monetary policy.

He added that the cost of borrowing had significantly constrained credit flows into the sector.

“The CBN should further reduce the MPR to below 20 per cent, especially for credit that flows to the manufacturing sector,” the DG said.

Despite the rise in confidence, manufacturers said they had yet to feel the benefits of government infrastructure spending, while FX shortages continued to limit production capacity more than three years after President Tinubu’s exchange rate liberalisation.

Ajayi-Kadir raised concerns about the flawed implementation of the Nigeria Tax Act 2025, saying businesses continue to face multiple tax collectors and regulatory agencies despite numerous promises to reduce the burden.

He lamented persistent port congestion, poor government patronage of made-in-Nigeria products and regulatory bottlenecks, arguing that the factors have prevented inventories from declining significantly.

He noted that only local sourcing of raw materials recorded a positive assessment, while production, distribution and shipping costs continued to rise during the quarter.

Although sales volumes improved marginally, capacity utilisation, production levels, investment and employment remained largely stagnant, he lamented.

Sectoral analysis showed the motor vehicle and miscellaneous assembly industry recorded the highest confidence level at 69.4 points, followed by wood and wood products (66.7) and textile/apparel/footwear (58.3).

In contrast, manufacturers in pulp, paper, printing, publishing and packaging posted the weakest confidence score of 38.6, while electrical/electronics recorded 42.5, just as chemicals and pharmaceuticals had 47.7.
Across industrial zones, manufacturers in Edo/Delta recorded the highest confidence level at 66.7 points, followed by Kano (63.9), Kwara/Kogi (63) and Oyo/Ondo/Ekiti/Osun (60.4).

Confidence remained extremely weak in Bauchi/Benue/Plateau (40), Anambra (41.7) and Ikeja (47.7), highlighting uneven recovery across Nigeria’s manufacturing hubs.