Manufacturers Seek Cost-Cutting Measures as August Inflation Falls Marginally to 15.39%
More importantly, a lower inflation rate does not necessarily mean that manufacturers are experiencing lower production costs
The Manufacturers Association of Nigeria (MAN) has called for targeted measures to reduce production costs after Nigeria’s headline inflation rate moderated marginally to 15.39 per cent in August 2026.
The August figure represents a 0.04 percentage-point decline from 15.43 per cent recorded in July, continuing the recent downward movement in headline inflation.
However, MAN said the marginal moderation should not be interpreted as a broad-based reduction in the cost of doing business, noting that manufacturers continue to face elevated energy, logistics, foreign exchange, raw material, financing and regulatory costs.
In its comments on the August 2026 inflation figures, the association said the decline was a positive development because price stability is important for business planning, investment and consumer welfare.
It, however, described the improvement as fragile, arguing that the more important issue for manufacturers is whether the production costs of goods are declining.
“More importantly, a lower inflation rate does not necessarily mean that manufacturers are experiencing lower production costs,” MAN said.
According to the association, manufacturers remain unable to fully pass rising production costs to consumers because of weak purchasing power. This continues to put pressure on profit margins while increasing the amount of working capital required to purchase the same volume of inputs.
MAN also warned that sustained high operating costs could constrain investment decisions and capacity utilisation, as some manufacturers may reduce production or avoid additional shifts when the cost of operating becomes commercially unsustainable.
The association said high domestic production costs could also weaken the competitiveness of Nigerian-made goods against imported products while limiting manufacturers’ ability to expand production and create additional jobs.
MAN called for measures to reduce the cost of energy used in industrial production, arguing that the objective of government policy should be to lower the amount manufacturers spend on energy to produce each unit of output.
It recommended dedicated and reliable electricity supply to major industrial clusters, priority access to gas for industrial users, incentives for investments in efficient captive power and renewable energy systems, as well as a review of electricity tariff structures affecting productive industries.
The association also highlighted transportation costs, noting that transport contributed 1.64 percentage points to the August inflation outcome.
MAN urged the Federal Government to identify and prioritise major transport corridors connecting ports, industrial clusters, agricultural production zones and major markets for rehabilitation and maintenance.
It also called for collaboration between the Federal and state governments to eliminate unnecessary road charges and overlapping transport-related levies.
