The Manufacturers Association of Nigeria (MAN) has warned that the unfolding geopolitical tensions in the Middle East poses immediate, severe and multifaceted risks to Nigeria’s manufacturing sector, while outlining urgent pathways to safeguard industry operators.
Director General of MAN, Segun Ajayi-Kadir, in a statement, said the sector is already grappling with the ripple effects of the global energy shock triggered by the conflict, warning that the sector’s projected 3.1 per cent real growth target for 2026 is now under serious threat.
According to him, manufacturers’ heavy reliance on gas and Automotive Gas Oil (diesel) for production has exposed them to spiraling energy costs, as rising global crude oil prices continue to push domestic pump and depot prices upward, eroding operating margins.
“Energy cost escalation is biting hard. Many manufacturers are seeing their margins wiped out almost overnight,” Ajayi-Kadir stated.
He further noted that imported inflation and escalating freight costs are compounding the crisis. Extended transit times and higher shipping expenses and logistics expenses, he explained, have made the importation of critical raw materials increasingly prohibitive.
“The implication is clear – production costs are rising sharply, while consumer purchasing power is weakening. This has created a dangerous situation where manufacturers are battling both high costs and unsold inventories.
“Manufacturers are now confronted with the dual threat of skyrocketing production costs and unsold inventories, a development that could derail the sector’s projected 3.1 per cent growth in 2026,” he said.
To mitigate the looming crisis, MAN called on the Federal Government to urgently implement targeted interventions. These include fast-tracking the Presidential Compressed Natural Gas (CNG) initiative for industrial clusters to reduce dependence on diesel, and establishing a dedicated foreign exchange window through the Central Bank of Nigeria for the importation of critical inputs.
The association also advocated for the domestication of petroleum supply chains by ensuring that local refineries prioritise supply to domestic manufacturers at competitive rates, alongside a temporary suspension of logistics levies and multiple taxation on haulage.
“The current crisis is a stark reminder of Nigeria’s vulnerability to external shocks due to our dependence on imported inputs,” Ajayi-Kadir said. “While we cannot control global geopolitics, we can control our domestic response.”
He stressed that the situation presents a critical opportunity for Nigeria to pivot towards genuine manufacturing self-sufficiency, warning that failure to act decisively could result in widespread factory closures and job losses across the country.
“To cushion logistics pressures, MAN recommended an immediate six-month suspension of multiple haulage levies, highway taxes and transit tolls imposed on manufacturers.
We cannot control global geopolitics, but we can control our domestic response,” Ajayi-Kadir stated. “This crisis must serve as a catalyst for building a more resilient and self-sufficient manufacturing sector, rather than repeating the mistakes of the past.”
He warned that failure to act decisively could lead to widespread factory closures, job losses and a significant setback to Nigeria’s industrialisation drive.
