Experts are projecting a significant growth for Nigeria’s manufacturing sector in 2026, following a period of modest recovery. The ability of the sector to achieve sustained expansion hinges on consistent policy implementation and the effective execution of ongoing economic reforms. This cautiously optimistic outlook is built upon a foundation of macroeconomic stability, anticipated favorable oil prices, increased foreign capital, stable energy costs, and the timely rollout of key industrial and fiscal policies designed to bolster domestic production.
The Manufacturers Association of Nigeria (MAN) anticipates a real growth of 3.1 percent for the sector, contributing 10.2 percent to the real Gross Domestic Product (GDP) in 2026. This projected improvement is heavily reliant on the effective implementation of incentives within the new tax laws. These laws aim to alleviate the burden of multiple taxation that has historically hindered manufacturers’ progress.
Featured snippet paragraph: The Nigerian manufacturing sector is expected to achieve 3.1 percent real growth and contribute 10.2 percent to the real GDP in 2026, provided new tax law incentives are effectively executed and key industrial policies are purposefully implemented.
Dr. Oluwasegun Osidipe, MAN’s Director of Research and Economic Policy, detailed the conditions necessary for this enhanced performance. He forecasts a further appreciation of the naira to N1,300–N1,400 per dollar, driven by a recovering global oil market, stronger external reserves, increased export earnings, and robust foreign investment and remittance inflows. Headline inflation is also expected to decelerate to 14 percent, supported by easing food prices, stable energy costs, and the naira’s appreciation.
The Central Bank of Nigeria (CBN) is expected to reduce its benchmark interest rate to around 23 percent, aligning with the disinflationary trend and aiming to stimulate credit expansion and output growth. Lower lending rates and the completion of the bank recapitalisation exercise are anticipated to improve credit accessibility for manufacturers, thereby strengthening investment and capacity utilization.
Osidipe highlighted the removal of redundant levies and the introduction of targeted tax incentives for small and medium industries as crucial steps that will boost liquidity for manufacturers, enabling them to reinvest in production. The extension of government stimulus packages, such as access to single-digit interest loans under the N75 billion industrial support fund, has already shown positive results, helping to increase capacity utilization from 57.6 percent in the latter half of 2024 to 61.3 percent in the first half of 2025.
Government patronage is also seen as a significant accelerator for growth. The example of Cross River State’s commitment to sourcing its automobile needs locally is a hopeful sign, with expectations that other state governments will follow suit. Increased government procurement can significantly ramp up production and positively impact the manufacturing industry.
George Onafowokan, Managing Director of Coleman Technical Industries Limited and chairman of MAN’s Ogun State branch, shares a similar optimistic outlook for sustained growth in 2026, attributing it to current macroeconomic stability. He points to a steadier naira and a downward trend in inflation as key factors supporting this view. The current economic growth rate, hovering between 3.4 and 3.9 percent, provides a solid base for manufacturers to scale their operations.
Onafowokan stressed that the full realization of 2026’s potential depends on the federal government finalizing and signing key fiscal policy measures that have been pending since 2023. He also identified the 2026 budget’s focus on capital expenditure, infrastructure, and security as crucial drivers for positive projections.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), views the 2026 economic outlook with cautious optimism. He expects Nigeria to transition more decisively from stabilization to growth, with GDP growth projected between 4.0 and 4.5 percent, supported by continued inflation moderation and stronger non-oil sector performance. Moderating inflation should boost domestic demand and allow for gradual monetary easing, potentially lowering interest rates and stimulating private investment.
Yusuf cautioned that several downside risks persist, including insecurity impacting agriculture and logistics, fiscal performance sensitivity to oil shocks, high operating costs, and significant debt service obligations constraining fiscal space. Geopolitical tensions and pre-election year uncertainties could also heighten risks.
Engr. Leye Kupoluyi, President of the Lagos Chamber of Commerce and Industry (LCCI), believes 2026 can be the year businesses truly feel the benefits of economic reforms. He sees 2025 as a turning point and emphasizes the need for 2026 to move beyond stability and translate reforms into broad-based prosperity. A key focus should be on intentionally boosting credit to the private sector through banks, alongside expected interest rate easing by the CBN.
With disciplined policy execution, enhanced security, infrastructure expansion, and a strong focus on inclusivity, Nigeria has the potential to make 2026 the year when the benefits of reform are finally felt by both businesses and households.
