The Manufacturers Association of Nigeria says the country’s manufacturing output will grow by 3.1 per cent in 2026. The association links the expected growth to new tax incentives, the harmonisation of levies under the new tax regime taking effect in January, and increased government patronage.
The projection is contained in the Manufacturers’ CEOs Confidence Index released in October. MAN says the forecasted 3.1 per cent growth compares to the 1.6 per cent recorded in the second quarter of 2025. It also expects the sector’s contribution to real Gross Domestic Product to rise to 10.2 per cent next year.
The Director of the Research and Economic Policy Division, Dr. Oluwasegun Osidipe, said the outlook depends on how well the new tax laws are implemented. He highlighted the National Single Window Project and the alignment of the Nigeria Industrial Policy with the Nigeria First framework as key factors.
Osidipe said manufacturers have struggled with multiple taxation. He noted that companies often paid various levies while moving goods across local government areas, adding that most of those charges have now been removed under the new tax laws.
He said the elimination of redundant taxes and the introduction of targeted incentives for small and medium manufacturers would help firms retain more funds and reinvest in production.
He added that most MAN members are small and medium industries. According to him, the tax incentives will boost their liquidity, expand operations, and strengthen output.
The MAN report shows an improvement in capacity utilisation. It rose from 57.6 per cent in the second half of 2024 to 61.3 per cent in the first half of 2025. MAN links the increase to government support programmes, including access to single-digit loans under the N75bn industrial fund.
Osidipe said credit access has widened as loans that previously attracted interest rates of 32 to 35 per cent are now available at much lower rates. He said cheaper credit would help manufacturers produce more, employ more people, and increase sales.
He also said higher government patronage would accelerate sector growth. He cited Cross River State’s commitment to buying locally assembled vehicles and urged other states to adopt similar policies.
Other projections in the MAN outlook include an appreciation of the naira to between N1,300 and N1,400 per dollar in 2026. MAN links this to stronger oil prices, improved reserves, and rising foreign investment.
The association expects headline inflation to drop to about 14 per cent, supported by stable food and energy prices. It also anticipates that the Central Bank of Nigeria will cut the benchmark interest rate to about 23 per cent to stimulate credit and output.
MAN forecasts overall GDP growth of up to four per cent in 2026, driven by higher oil production, better fiscal performance, growth in manufacturing and financial services, and increased consumer spending during the election season in the fourth quarter.
Nigeria’s new tax laws will take effect in January 2026. President Bola Tinubu signed four related bills into law on June 26, 2025. The reforms aim to streamline levies, end multiple taxation, and provide targeted incentives for small and medium businesses.
