Chair, Manufacturers Association of Nigeria (MAN), Ogun State Chapter, George Onafowokan, has expressed concern over the decline in contribution of the manufacturing sector to Nigeria’s gross domestic product (GDP), which he said fell from 16.04 per cent in Q4 2023 to 12.68 per cent by the end of 2024.
Onafowokan spoke during the private session of the 40th Annual General Meeting (AGM) of the Ogun MAN branch, where he delivered a sector-focused address highlighting the challenges manufacturers face amid Nigeria’s turbulent economic climate.
He attributed the sector’s decline to rising inflation, naira depreciation, high interest rates and escalating energy costs, which he said have significantly increased production expenses, reduced consumer spending and eroded profit margins.
“Manufacturers are operating under intense pressure. Consumer spending is down, margins are tight and opportunities for innovation or expansion are being stifled,” he said.
Despite the bleak outlook, he commended Ogun-based manufacturers for their resilience and unwavering commitment to keeping operations afloat and retaining employees, even in the face of volatile inflation, FX scarcity and disruptive policy reforms.
In addition to many macroeconomic hurdles, Onafowokan criticised the growing burden of local regulatory interference in Ogun state. He cited ‘unconstitutional demands’ such as arbitrary levies, huge, unfair fines and regulatory harassment by local government authorities. He said MAN has intensified advocacy and stakeholder engagement to counter these anti-business practices and safeguard members’ interests.
Onafowokan also faulted the apex bank’s aggressive monetary policy stance. He decried the raising of the monetary policy rate (MPR) six times last year, peaking at 27.5 per cent by year-end.
This, he said, has raised commercial lending to 28.6 per cent to 35 per cent for manufacturers.
“These elevated borrowing costs are strangling working capital and stalling planned expansions. Access to affordable financing remains our most urgent concern and we must explore viable funding alternatives,” he said.
He noted that several policy reforms last year delivered mixed results for the real sector, including deregulation of the downstream oil sector and the Naira-for-Crude initiative, which he said drove up fuel and logistics costs.
He added that the Band A electricity tariff hike and the temporary ban on sachet alcohol and PET bottles under 200ml — later suspended — disrupted manufacturing operations and caused job losses in sub-sectors.
However, the MAN chairman welcomed the tax reforms signed into law last month, including simplified tax laws and corporate tax reductions. He said they could enhance investor confidence and ease the regulatory burden on businesses.
“We support reforms that encourage voluntary compliance and predictability, but continuous engagement with manufacturers is essential for smooth implementation,” he said.
He also lamented the continued rise in inflation, with headline inflation reaching 34.8 per cent and core inflation at 29.28 per cent by December 2024. Manufacturers, he said, either had to pass rising costs to consumers or absorb losses to stay in business.
Despite the current economic headwinds, he expressed cautious optimism, saying, “We celebrate 40 years of manufacturing excellence in Ogun. Our priority remains growth despite constraints. Affordable finance, policy stability and regulatory support are key to unlocking our next chapter.”
He said the session aimed to stimulate fresh dialogue on innovative financing, improved policy frameworks and strengthened collaboration between manufacturers, policymakers and financial institutions to reposition the sector for recovery and long-term expansion.
At the elections held during the AGM, Onafowokan was re-elected chair of the Ogun MAN branch for a third consecutive term while Motunrayo Elegberun also returned as Executive Secretary.
