The Manufacturers Association of Nigeria (MAN) has predicted a better Nigeria in 2026 with a stronger naira, declining inflation, and improved access to credit, while the nation’s Gross Domestic Product (GDP) will grow by 4 per cent.
Nigeria has endured an economy in which inflation inched up to 34 per cent before it eased to 18 per cent in September. While private sector credit declined slightly to N77.83 trillion in May 2025 from N77.91 trillion in April, according to the Central Bank of Nigeria’s (CBN) latest Money and Credit Statistics, the Naira has hovered between N1450 and N1500.
Despite inflation easing to 18.02 per cent in September, prices of food items have refused to come down, showing that the data from the National Bureau of Statistics did not match market realities, except for grains like rice, millet, corn and beans, whose prices have declined
Speaking during the 2025 MAN Think Tank Session in Lagos, Oluwasegun Osidipe, Director of Research and Economic Policy Division at MAN, said the outlook for 2026 is supported by favourable oil prices, increasing foreign investments, stable energy costs, and the effective implementation of industrial and fiscal policies.
According to him, the naira is expected to appreciate further to between ₦1,300 and ₦1,400 per dollar, driven by a rebound in global oil prices, stronger external reserves, rising export earnings, and higher remittance inflows. He noted that headline inflation is projected to ease to 14 per cent, supported by lower food prices, energy stability, and exchange rate appreciation.
“The Central Bank of Nigeria (CBN) is anticipated to implement further cuts in the benchmark interest rate to about 23 per cent in line with the disinflationary trend and efforts to stimulate credit expansion and output growth,” Osidipe said.
He added that the ongoing bank recapitalisation exercise and a reduction in lending rates would enhance credit access to manufacturers, strengthening investment flows and capacity utilisation across the sector. MAN forecasts real manufacturing growth at 3.1 per cent in 2026, with the sector’s contribution to GDP expected to rise to 10.2 per cent.
Osidipe attributed the positive outlook to the implementation of new tax incentives, the operationalisation of the National Single Window Project, and the full execution of the Nigeria Industrial Policy in line with the “Nigeria First” policy framework.
He further projected overall GDP growth at 4 per cent, buoyed by higher oil output, improved fiscal management, and expansion in both the manufacturing and financial sectors. He added that increased consumption during the 2026 election season would further boost economic activity.
Gradual Economic Stabilisation
MAN’s projection comes amid signs of recovery after two years of economic turbulence marked by high inflation, currency depreciation, and factory shutdowns. As of September 2025, headline inflation had declined to 18.02 per cent from a record 34.8 per cent in December 2024, while the naira appreciated by 11.3 per cent year-on-year to between ₦1,458 and ₦1,495 per dollar.
External reserves have also risen to $43 billion, the highest in six years, providing import cover for up to nine months. GDP growth accelerated to 4.23 per cent in the second quarter of 2025, supported by a 20.46 per cent increase in oil output and steady performance in non-oil sectors.
A recent economic rebasing to a 2019 base year valued Nigeria’s economy at $243 billion, though manufacturing’s GDP share remains at 9.6 per cent, below its historical average.
The CBN’s Monetary Policy Rate currently stands at 27 per cent after a 50-basis-point cut in September, the first easing since 2020. Although unsold manufacturing inventory has dropped sharply from ₦952 billion in the first quarter of 2024 to ₦29 billion in the first quarter of 2025, capacity utilisation remains below 60 per cent due to a persistent rise in input costs.
Outlook and Risks
MAN’s 2026 outlook is built around four key pillars: currency stability, inflation moderation, monetary easing, and policy consistency. The association expects the naira’s appreciation to reduce import costs for raw materials and production inputs, ultimately improving manufacturers’ profitability.
Inflation is expected to ease to 14 per cent, supported by stable food prices, local refinery output, and sustained exchange rate stability. The anticipated cut in interest rates and improved access to credit could also stimulate manufacturing output and business expansion.
However, Osidipe cautioned that the outlook depends heavily on consistent policy implementation. He emphasised that tax incentives must reach real manufacturers, the National Single Window must become fully operational, and power supply must be stable.
“Policy consistency is non-negotiable,” he said. “The National Single Window must go live, tax incentives must reach manufacturers, and power supply must be reliable, not promised.”
He also noted that while optimism is returning to the sector, challenges such as weak oil production, food insecurity, and global market volatility could still weigh on growth prospects.
For many factory owners who endured layoffs and shutdowns during the crisis years, MAN’s forecast represents cautious optimism and a glimpse of hope. If inflation continues to decline, the naira remains stable, and credit becomes more accessible, 2026 could mark the long-awaited recovery of Nigeria’s manufacturing industry.
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