Nigeria’s manufacturing industry is at a pivotal moment, with business leaders warning that without supportive fiscal reforms, recent economic stability may not translate into lasting growth in the coming year.
George Onafowokan, Managing Director and Chief Executive Officer of Coleman Wires and Cables, said policy inconsistency remains the biggest hurdle facing manufacturers, despite improvements in inflation and exchange rate stability over the past year.
Assessing the sector’s outlook, Onafowokan praised the Central Bank of Nigeria’s tight monetary stance, noting that it has helped rein in inflation and restore relative calm to the foreign exchange market. He stressed, however, that monetary discipline on its own is insufficient to make Nigerian manufacturing competitive, especially in the absence of aligned fiscal policies.
According to him, energy costs—particularly gas pricing—are the most urgent challenge. With most manufacturers relying on self-generated power, many have shifted to gas-based systems but are paying significantly higher prices than competitors in other countries. He argued that the current pricing structure weakens Nigeria’s industrial appeal and erodes the cost advantage needed to compete in regional and global markets.
Industry proposals for more affordable domestic gas pricing, long championed by the Manufacturers Association of Nigeria, have yet to be implemented. Onafowokan said the gap between export gas prices and what local manufacturers pay continues to inflate production costs, especially for sectors like cable manufacturing that depend heavily on imported inputs. In contrast, industries with stronger local sourcing, such as cement, are better insulated from these pressures.
He also expressed concern over prolonged delays in approving the monetary tariff policy, which is intended to provide targeted protection and incentives for local industries. The repeated postponement, he warned, has denied manufacturers a critical policy tool needed to scale operations and contribute meaningfully to economic growth.
While acknowledging that high interest rates remain a constraint, Onafowokan said a gradual easing over the next year could support investment without undermining price stability. He cautioned against aggressive wage hikes that are not matched by productivity gains, recalling how similar patterns contributed to the decline of Nigeria’s textile industry decades ago.
On taxation, the manufacturing executive offered a more optimistic view, saying the new tax framework could benefit compliant businesses through lower corporate tax rates and a broader, fairer tax net. He urged the government to intensify public communication to address concerns around withholding taxes and multiple taxation.
Looking ahead, Onafowokan said Nigerian manufacturers are positioning to expand exports across Africa and take advantage of anticipated increases in infrastructure spending, particularly in telecommunications and energy. He expressed confidence that with coherent fiscal support, effective policy execution, and data-driven reforms, the sector can move decisively from recovery into sustained growth.
