Business

Manufacturers groan as rising credit, production costs threaten recovery

Published

1 hour ago

August 17, 2026

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By Yinka Kolawole

Nigeria have warned that the high cost of credit and rising production expenses remain major threats to the recovery of the manufacturing sector, despite a renewed improvement in manufacturers’ confidence in the economy.

This was revealed by the Manufacturers Association of Nigeria (MAN) in its

Manufacturers’ CEOs Confidence Index (MCCI) for the second quarter of 2026 (Q2’26).

Manufacturers’ CEOs identified limited access to finance as their primary challenge, with two in every three executives citing commercial bank lending rates as a major disincentive to manufacturing productivity. They also described the volume of credit available to the sector as inadequate.

The manufacturers linked the high cost of borrowing directly to the Central Bank of Nigeria’s (CBN) monetary policy stance, particularly the Monetary Policy Rate

(MPR), which stood at 26.5 per cent during the quarter.

According to the manufacturers, the prevailing high-interest-rate regime had increased the cost of credit and, by extension, production costs, weakening manufacturers’ ability to expand output, invest and create jobs.

The report noted that although the MPR had been reduced and maintained at 26.5 per cent, the rate remained too high to support the financing needs of the real sector.

The manufacturers further noted that the limited flow of bank credit, combined with rising energy, distribution, shipping and raw material costs, continued to constrain productivity and capacity utilisation.

“Two in every three CEOs cited commercial bank lending rates as a disincentive to manufacturing productivity,” the report stated, stressing that the cost of credit directly influences production costs.

They also complained about frequent power outages, inadequate foreign exchange supply, high production costs, shortages of raw materials, multiple taxation and inadequate government infrastructure.

Despite reforms in the foreign exchange market and relative stability in the naira, about half of the manufacturers surveyed said improvements in foreign exchange sourcing had not translated into sufficient access to foreign exchange for their operations.

They argued that the situation continued to limit manufacturers’ ability to operate at full capacity, while also raising the cost of imported inputs and machinery.

Only 27 per cent of manufacturing executives considered government expenditure on infrastructure encouraging for manufacturing activity, reflecting concerns over the slow impact of public infrastructure investments on productivity.

The report further showed that manufacturers continued to face rising production, distribution and shipping costs during the quarter, even as sales volume recorded a modest improvement.

Despite the challenges, the report noted that manufacturers’ confidence rose by 3.4 points to 52.1 in Q2’26 from 48.7 in Q1’26, but the improvement was driven largely by expectations of better business conditions rather than a significant improvement in the actual operating environment.

Looking ahead, manufacturers were more optimistic about the third quarter, projecting business conditions at 55.6, employment at 55.2 and production conditions at 63 points.

Commenting, Director General of MAN, Segun Ajayi-Kadir, said the projected improvement would depend largely on policy implementation and measures to ease the cost of doing business.

He called on CBN to reduce the MPR to below 20 per cent to unlock manufacturing growth, improve access to affordable credit, and give priority allocation of foreign exchange to manufacturers.

“Reducing financing and production costs was critical to converting the renewed confidence among manufacturers into actual increases in output, investment and employment,” he stressed.

Speaking on the specific government policies or economic developments that are driving the renewed optimism among manufacturers, with the MCCI showing manufacturing confidence at a 2-year high, Ajayi-Kadir stated: “What has happened in the past is that for two years we have witnessed a lull in terms of how confident manufacturers are. But what we are seeing now is that there’s a departure and it is based not on the experience of real improvement in their condition but in the expectation and that’s based on the fact that we believe that government will follow through on some of its reform measures that are beginning to stabilize the economy.

“For instance, the exchange rate, the tax reform has given hope that we are now going to have a tax system that supports productivity and actually incentivizes it. Even though we currently have a setback that the law is going to take a retroactive effect, we hope that this is resolved otherwise it will just wipe off the confidence that we have in that area.”

Business

India-Nigeria trade hits $9bn as firms deepen local production

Published

1 hour ago

August 17, 2026

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By Yinka Kolawole

India-Nigeria bilateral trade rose by 26 per cent to about $9 billion in 2025–26, from $7.13 billion recorded in 2024–25, as economic ties between both countries deepen beyond oil and commodities into manufacturing, healthcare, energy, technology and job creation.

The Indian High Commissioner to Nigeria, Abishek Singh, disclosed that more than 200 Indian companies currently operate in Nigeria and have created nearly 100,000 jobs, making Indian businesses the second-largest employers of Nigerians after the Federal Government.

The expanding corporate presence also signals a shift from an export-driven relationship towards local production. Indian companies are increasingly establishing manufacturing and production facilities in Nigeria across pharmaceuticals, power, construction, consumer goods, healthcare and other services. With healthcare is emerging as a major area of cooperation, India’s Deputy High Commissioner to Nigeria, Vertika Rawat, said Indian pharmaceutical exports to Nigeria reached $315 million in 2024–25, with India accounting for about 40 per cent of Nigeria’s pharmaceutical imports and more than 90 per cent in some medicine categories.

She put Indian investment in pharmaceutical manufacturing in Nigeria at about $4 billion, reflecting growing efforts to produce medicines locally rather than rely mainly on imported finished products. The trend is expected to support skilled employment, strengthen supply chains and improve domestic production capacity.

The economic relationship between both countries, which dates back more than six decades, was elevated to a Strategic Partnership in 2007. Political engagement has also intensified, with President Bola Tinubu visiting India for the G20 Summit in 2023 and Prime Minister Narendra Modi visiting Nigeria in November 2024.

Beyond private investment, India has provided development assistance, concessional financing and technical training through its Indian Technical and Economic Cooperation programme. The expanding partnership offers Nigeria access to Indian capital, technology and expertise to boost productive capacity.

Business

18 Years After: RMAFC moves to review president, governors, lawmakers’ pay

Published

22 hours ago

August 16, 2026

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By Babajide Komolafe, Economy Editor

The Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has completed the review of the remuneration of political office holders, 18 years after their salaries were last reviewed by law, saying the proposed new remuneration and revenue allocation Bills will reach the National Assembly before the end of the year.

Chairman of RMAFC, Dr Mohammed Bello Shehu, disclosed this yesterday at a breakfast session with members of the Guild of Editors in Lagos.

Shehu said the remuneration review covered the president, governors, deputy governors, legislators and other political office holders, stressing that the existing salary structure was based on legislation dating back to 2007/2008.

“From 2008 to date, the salaries of not only legislators but also ministers, governors and the President have not been reviewed by law”, he said.

“The Commission attempted to review them twice — once in 2013 and again in 2022. But both President Goodluck Jonathan and President Muhammadu Buhari, for whatever reasons, were unable to transmit the review to the National Assembly.

“Where we are now, as far as we know and as far as every organisation is aware, the salaries of legislators — senators and members of the House of Representatives — still remain those contained in the Act of 2007/2008. They have not changed”.

According to him, the latest review has been completed and is being processed in collaboration with the Federal Ministry of Justice.

“We have completed the process. Very soon, the President will receive the package and it will be transmitted to the National Assembly.

“We have sent a copy to Mr. President. We have also gone to the Ministry of Justice. They have drafted a new Act. They have drafted a new one and sent it back to us. We are looking at it to ensure conformity with what we have done.

“After that, we will take it to Mr. President and say: ‘Sir, we think it is time for you to send this to the National Assembly for them to make it an Act.’”

Shehu argued that the prolonged stagnation of political office holders’ salaries was no longer sustainable, noting that the cost of living had changed considerably since 2008.

“The Commission is an advocate of fair wages for fair work. If you give a minister less than N1 million a month, come on, that is not reasonable.

“The salary of a minister is less than N1 million a month. My commissioners here are Federal Commissioners, and their salaries are also less than N1 million a month. These salaries have not been reviewed from 2008 to date”.

He added that better remuneration could help reduce incentives for corruption.
“I believe that political office holders should be paid something reasonable so that they can operate effectively and reduce the temptation for corruption.

“You cannot have the salary of this class of people stagnant from 2008 until now. And anytime you say you want to raise it, everybody will react negatively. What you are effectively doing is allowing them to go and become corrupt for whatever they want to do. That is not good for the system.”

On revenue allocation, Shehu said RMAFC had also completed a new formula designed to reflect additional responsibilities being assumed by state governments.

His words: “We have made adjustments, and now we have completed the process. Mr. President is aware. We are working in collaboration with the Ministry of Justice to draft the enabling Act. Once it is ready, Mr. President will transmit it to the National Assembly.

“My members here, the Plenary of the Commission, have approved the new formula”.
He said the Commission expected the remuneration and revenue allocation Bills to be ready before the end of the year.

LG autonomy

On local government autonomy, Shehu said RMAFC had established monitoring committees for both state and local governments to ensure proper utilisation of allocations.

“The Commission used to monitor local governments previously, and we have now set up a Local Government Monitoring Committee and a State Monitoring Committee.”

Business

PenCom to sanction PFAs as only 17% of RSA holders recaptured

Published

3 days ago

August 14, 2026

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By Rosemary Iwunze

The National Pension Commission (PenCom) has threatened to sanction Pension Fund Administrators (PFAs) that fail to meet prescribed targets under the ongoing Retirement Savings Account (RSA) data recapture exercise.

PenCom, in its first-quarter 2026 report, disclosed that only 17.03 per cent of the industry’s legacy RSA holders had completed the mandatory data recapture exercise.

According to the report, 58,220 RSAs were recaptured during the quarter, bringing the cumulative number of recaptured accounts to 1,485,052 out of an estimated 8,722,609 legacy accounts.

The Commission warned that, at the current rate, completing the outstanding recapture exercise would take more than 25 quarters.

It therefore said the exercise must move from being PFA-driven to a Commission-led process, with quarterly targets and performance reports to be introduced.

“PenCom will introduce PFA-level quarterly recapture targets, publish quarterly progress reports, and impose regulatory sanctions on operators that materially under-perform against target during 2026,” it stated.

Norrenberger Pensions led the industry during the first quarter with 17,157 recaptures, representing 29.47 per cent of total Q1’26 activity.

Stanbic IBTC followed with 10,963 recaptures, while Veritas Glanvills recorded 6,328.

Guaranty Trust Pensions and FCMB Pensions completed the top five with 3,918 and 3,888 recaptures respectively.

The data recapture exercise, introduced by PenCom in August 2019, requires RSA holders to update and validate their personal and biometric information with their PFAs.

Meanwhile, PenCom said Katsina State’s amendment of its pension law to adopt the Contributory Pension Scheme (CPS) increased the number of states with CPS legislation to 25 from 24.

Eight states are fully compliant, having enacted the required legislation and commenced implementation through licensed PFAs, while 17 others have enacted legislation but are yet to commence implementation.