Nigeria’s manufacturing sector is set to record a projected 3.1 per cent growth in 2026, up from the 1.6 per cent recorded in the second quarter of 2025, according to the Manufacturers Association of Nigeria (MAN). The anticipated growth is largely attributed to new tax incentives, harmonisation of levies under the upcoming tax regime, and increased government patronage aimed at supporting local production.
Dr. Oluwasegun Osidipe, Director of MAN’s Research and Economic Policy Division, explained that the improvement hinges on the effective implementation of the new tax laws, the National Single Window Project, and alignment with the Nigeria Industrial Policy under the Nigeria First framework. “Manufacturers have long struggled under multiple taxation, which slowed growth. The new tax law eliminates many redundant levies, freeing resources for reinvestment in production,” he noted.
The reforms are expected to particularly benefit small and medium enterprises, which make up the bulk of MAN’s membership. Targeted incentives and exemptions will boost liquidity, enabling manufacturers to expand operations and create jobs. MAN’s economist highlighted that capacity utilisation in the sector has already improved from 57.6 per cent in late 2024 to 61.3 per cent in mid-2025, helped by government stimulus packages including single-digit interest loans under the N75 billion industrial support fund.
Government procurement is also expected to accelerate growth. Dr. Osidipe cited Cross River State’s commitment to sourcing automobiles locally as an example, suggesting that increased state and federal patronage could significantly boost domestic production. Additionally, a stronger naira, easing inflation, and a potential interest rate cut by the Central Bank of Nigeria are likely to support manufacturing and overall economic expansion.
MAN’s outlook further anticipates a 4 per cent overall GDP growth in 2026, driven by higher oil production, increased consumption, and expansion in both manufacturing and financial services. The new tax laws, signed by President Bola Tinubu in June 2025, are set to take effect in January 2026, aiming to streamline levies, eliminate multiple taxation, and provide targeted incentives to stimulate productivity and investment across Nigeria’s economy.
source: Punch