High Inflation, Interest Rates Weaken Nigeria’s Manufacturing Sector In 2024 – MAN President

The President of the Manufacturers Association of Nigeria (MAN), Chief Francis Meshioye, says Nigeria’s manufacturing sector is struggling in 2024 due to high inflation, rising interest rates, and the depreciation of the naira.

Speaking at the Lagos Chamber of Commerce and Industry (LCCI) 2025 Economic Review and Outlook Conference in Lagos, Meshioye, represented by Dr. Segun Alabi, MAN’s Head of Corporate Communications, highlights that these factors, along with increased electricity tariffs, are limiting the sector’s contribution to Nigeria’s Gross Domestic Product (GDP).

He urges the government to take immediate action to address these economic challenges, improve productivity, and drive national development.

Looking ahead, Meshioye stresses that ongoing economic reforms, including proposed tax changes and efforts to stabilize key macroeconomic indicators, will determine the sector’s performance in 2025.

He calls on the Federal Government to remove obstacles hindering economic growth and speed up necessary reforms to achieve meaningful progress.

“I am encouraged by the resilience of our business community despite the difficulties we are facing. I believe that by working together, we can overcome these challenges and build a stronger, more sustainable economy,” Meshioye states.

He emphasizes that the private sector must work alongside the government to drive economic growth, create jobs, and improve living standards for Nigerians.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says Nigeria’s economy stands to gain from the rebasing of the Gross Domestic Product (GDP), set to take place in 2025.

  • The National Bureau of Statistics (NBS) plans to update Nigeria’s GDP base year from 2010 to 2019 to provide a more accurate economic assessment.
  • In 2025, the government will introduce budget process reforms, revise the medium-term expenditure framework, and enhance the fiscal strategy paper to support economic growth.
  • Oyedele explains that GDP rebasing will positively impact the country’s tax-to-GDP ratio, improve the measurement of per capita income, and strengthen investor confidence in Nigeria’s economy.

According to Oyedele, rebasing the economy signals a more favorable investment climate, encouraging investors to take Nigeria more seriously.

“The rebasing of the Consumer Price Index (CPI) basket will also provide a clearer picture of inflation trends and economic direction,” he states.

Oyedele confirms that discussions on the proposed tax reform bills are ongoing, with expectations that they will be enacted into law by the first quarter of 2025.

“These tax reforms contain significant provisions that can benefit the country, from business-friendly policies to cost and tax reductions, ensuring that small businesses can operate without excessive burdens,” he adds.

He expresses optimism about 2025, predicting improved business conditions, stronger economic policies, and greater financial stability for individuals and families.

Oyedele reaffirms President Bola Tinubu’s commitment to reducing Nigeria’s inflation rate in 2025, noting that foreign exchange rates are likely to stabilize as cost-driving factors ease. He assures that the country will experience increased foreign exchange inflows into the federation account.

  • GDP rebasing adjusts economic calculations to reflect updated price benchmarks. Nigeria’s GDP will shift from using 2010 as a base year to 2019.
  • The CEO Confidence Index of the Manufacturers Association of Nigeria (MAN) declines in Q2 2024 due to high electricity tariffs and interest rates.