Despite recent reforms, less than 50 percent of Nigerian manufacturers were unable to access foreign exchange through the official window in the third quarter (Q3) of 2025.
Despite the improved rate of foreign exchange sourcing, less than 51 per cent of manufacturers had access to foreign exchange demand at the official window, according to the latest report of the Manufacturers Association of Nigeria (MAN) CEO Confidence Index (MCCI) released on Tuesday.
The report said high exchange rates and limited liquidity are still major challenges for manufacturers in Africa's most populous country.
Nigeria issued the Naira in June 2023 to restore investor confidence and improve the country's business environment. Since the bold move, companies are no longer wasting energy lobbying for scarce official foreign exchange allocations and can instead focus on improving productivity and competitiveness.
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MAN estimates that the Nigerian economy will grow by four percent in 2026 due to higher oil production and further improvement in the fiscal position.
Manufacturers also expressed concern over the country's high debt rate of 37 percent and the loss of jobs in the economy despite growing confidence in the economy.
According to him, high interest rates make it challenging for manufacturers to get affordable loans, invest in expansion and create new jobs.
The report said the average lending rate for manufacturers stood at 37 per cent in the first nine months of the year despite the low monetary policy rate (MPR) of the Central Bank of Nigeria (CBN).
The MCCI report shows that the Nigerian manufacturing sector recorded a loss of 18,935 jobs in the first half (H1) of 2025, which is 74 percent higher than the job loss recorded by the industry in the second half (H2) of 2024.
“Although low, alternative energy costs of ₦676.6 billion and raw material imports of ₦1.72 trillion in H1 2025 remain a heavy burden on operating costs and employment, with a loss of 18,935 jobs recorded over the same period,” the report said.
“Additionally, high average lending rates of 36.6 percent, reduced credit access to ₦7.72 trillion and rising unsold inventory of ₦1.04 trillion are limiting performance,” the report said.
Overall, the sector's fragile recovery requires urgent policy actions to cut energy costs, strengthen foreign currency liquidity and expand affordable credit access to accelerate growth.
The overall MAN CEO Confidence Index also increased by 0.4 points from 50.3 points in the second quarter (Q2) to 50.7 in Q3 2025. However, real output growth fell to 1.6 per cent from 1.69 per cent in the second quarter, bringing its contribution to GDP to a modest 7.81 per cent from 9.62 per cent.
According to MAN's Q3 report, the current business situation, employment and production level indices recorded improvement due to a continued deflationary trend and a more stable exchange rate.
However, the report said the current production index declined due to industrial disputes in the oil and gas sector, which disrupted gas supplies, increased energy costs and disrupted manufacturing output.
Estimates for business conditions, employment conditions and output levels in the next quarter improved by 1.8 points, 0.1 points and 0.2 points, respectively.
The report attributed the boosted estimates for all three indices to a 50 basis point cut in the benchmark interest rate, suspension of the four per cent free-on-board levy and the introduction of tax incentives on local sourcing of raw materials.
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It said the expectation of presidential assent, the implementation of the 30 percent value addition requirement on raw material exports, the expectation that the Nigeria First Policy and the upcoming industrial policy will be driven by the private sector are part of the increased manufacturers' optimism in their estimates.
MAN Director General Segun Ajayi-Kadir said that despite a slight uptick in manufacturers' confidence levels in the economy, all current indices remain below the 50-point range, indicating that underlying challenges, particularly high inflation, exchange rates and interest rates, are weighing on the sector.
