By Yinka Kolawole

Over the past three years, President Bola Tinubu’s administration has rolled out an ambitious package of economic and industrial reforms designed to reposition Nigeria’s manufacturing sector, attract investment, deepen local value addition and stimulate production-led growth.

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From intervention funds and industrial roadmaps to fiscal reforms, local content policies and foreign exchange restructuring, the administration has introduced several initiatives aimed at strengthening the country’s industrial base. 

However, while manufacturers acknowledge the intent and potential of many of these policies, they argue that tangible improvements in industrial performance have yet to materialise.

The Manufacturers Association of Nigeria (MAN) says the challenge is no longer the absence of policy frameworks but the inability of those policies to translate into lower production costs, improved competitiveness and measurable industrial growth.

Director General of MAN, Segun Ajayi-Kadir, described the past three years as a period of difficult but consequential economic transition, noting that the administration had demonstrated courage in addressing long-standing structural distortions within the economy.

According to him, however, the burden of the reforms has fallen heavily on manufacturers.

N200bn Intervention Fund 

Among the administration’s flagship interventions is the N200 billion Presidential Intervention Fund introduced to support manufacturers and Micro, Small and Medium Enterprises (MSMEs).

The fund was structured into three components comprising a N75 billion Manufacturing Sector Fund, N75 billion MSME Loan Scheme and N50 billion Nano Business Support Scheme.

The initiative was conceived as a stimulus package to ease access to affordable financing and support productive enterprises struggling under rising operating costs.

While manufacturers welcomed the intervention, MAN maintains that the broader industrial environment remains challenging, with many firms still grappling with high energy costs, exchange rate pressures and expensive credit, limiting the overall impact of intervention financing.

Nigeria Industrial Policy 2025 

The administration also unveiled the Nigeria Industrial Policy (NIP) 2025, a comprehensive 10-year framework intended to transform the country’s industrial landscape.

The policy targets raising manufacturing’s contribution to Gross Domestic Product (GDP) to between 20 and 25 per cent by 2030, while proposing the recapitalisation of the Bank of Industry (BoI) to N3 trillion to expand industrial financing.

MAN views the policy as one of the most significant industrial initiatives introduced by the administration.

According to Ajayi-Kadir, the roadmap provides a strategic framework capable of driving industrial transformation, improving access to finance and strengthening development finance institutions.

However, he insists that the policy’s success will depend entirely on implementation and the government’s ability to create a supportive operating environment for manufacturers.

‘Nigeria First’ Policy

Another major initiative is the ‘Nigeria First’ policy, which directs Ministries, Departments and Agencies (MDAs) to prioritise locally manufactured goods and services in public procurement.

The policy seeks to stimulate domestic production, reduce dependence on imports and create market opportunities for indigenous industries.

MAN has strongly welcomed the initiative, describing it as potentially transformative for local manufacturers.

According to the association, effective implementation across all government institutions could significantly expand demand for Nigerian-made products, encourage new investments and deepen domestic value chains.

“The renewed emphasis on local content procurement through the Nigeria First framework represents an important step toward strengthening domestic industrial capacity,” MAN DG said.

Nevertheless, he cautioned that the policy must be consistently enforced to avoid becoming another well-intentioned initiative with limited practical impact.

Foreign Exchange Reforms

One of the most consequential economic reforms undertaken by the administration was the unification of foreign exchange (FX) windows and the liberalisation of the exchange rate regime.

The reforms were designed to improve transparency, eliminate market distortions and attract foreign investment.

While acknowledging these objectives, MAN said the immediate impact on manufacturers has been severe, noting that the sharp depreciation of the naira significantly increased the cost of imported machinery, raw materials and industrial inputs.

According to MAN, many manufacturers were forced to absorb substantial cost increases, resulting in higher product prices, reduced profit margins and delayed expansion plans.

30% Local Value Addition 

The proposed legislation requiring a minimum of 30 per cent local value addition before selected agricultural commodities and solid minerals can be exported has received strong support from manufacturers.

The bill, which has already been passed by both chambers of the National Assembly and awaits presidential assent, seeks to encourage domestic processing rather than the export of raw materials.

MAN believes the policy could become a major catalyst for industrialisation by stimulating local processing industries, increasing value retention within the economy and creating jobs across manufacturing value chains.

The association argues that the measure aligns with global industrialisation strategies that prioritise value addition before export.

2025 Tax Reform Act

Among the administration’s most celebrated reforms from the perspective of manufacturers is the 2025 Tax Reform Act.

The legislation introduces far-reaching fiscal changes aimed at improving competitiveness and reducing the burden of taxation on businesses.

MAN has particularly welcomed provisions such as withholding tax exemptions, expanded Value Added Tax deductibility on fixed assets and services, phased reductions in Companies Income Tax, research and development incentives and targeted support for small businesses.

The association believes these measures could significantly improve the business environment and encourage industrial investment.

MAN also expressed optimism about efforts to harmonise taxes and levies across states, noting that multiple taxation remains one of the most persistent challenges facing manufacturers.

Naira-for-Crude Initiative

The administration’s Naira-for-Crude initiative was introduced to enable domestic refineries purchase crude oil in naira rather than in US dollars.

The policy was designed to reduce pressure on FX demand, strengthen the local currency and improve domestic energy security.

MAN considers the initiative one of the more impactful reforms introduced so far.

According to Ajayi-Kadir, the policy has helped ease pressure on FX demand within downstream petrochemical and plastics value chains, offering some relief to manufacturers dependent on locally refined products.

National Single Window

In a bid to improve trade facilitation and reduce bottlenecks at ports, the government launched the National Single Window (NSW), a digital platform designed to integrate government agencies and private stakeholders involved in import and export processes.

The initiative aims to significantly reduce cargo clearance times, improve transparency and lower transaction costs.

MAN has welcomed the platform, noting that efficient trade logistics remain critical to industrial competitiveness.

According to the association, successful implementation of the Single Window system could reduce delays at ports, improve supply chain efficiency and lower operating costs for manufacturers.

Challenges Persist

Despite acknowledging the potential benefits of many of the government’s industrial initiatives, MAN insists that manufacturers continue to face significant challenges arising from broader macroeconomic reforms.

Ajayi-Kadir noted that the removal of fuel subsidies, exchange rate liberalisation, electricity tariff increases and tight monetary policies have dramatically altered the operating environment.

Manufacturers have experienced soaring energy costs, higher logistics expenses, and elevated borrowing costs.

The association also expressed concern about the state of electricity supply.

According to MAN, despite substantial tariff increases over the past three years, power supply remains unstable due to recurring grid failures and system disruptions.

As a result, many manufacturers continue to rely heavily on diesel, gas and petrol-powered alternatives, significantly increasing production costs and reducing competitiveness.

In response to inflationary pressures, monetary authorities raised the Monetary Policy Rate (MPR) several times and tightened access to credit.

While acknowledging the need for macroeconomic stability, MAN argues that borrowing costs have become prohibitively expensive for manufacturers seeking to invest and expand.

From Policies to Industrial Outcomes

For manufacturers, the central question is no longer whether the government has introduced enough policies but whether those policies can deliver measurable industrial results.

“The reforms have laid the groundwork for long-term economic restructuring, but macroeconomic stabilisation must now transition into industrial recovery and growth,” Ajayi-Kadir stated.

According to him, Nigeria’s manufacturing sector requires a more coordinated policy environment that deliberately lowers the cost of production, supports investment and enhances competitiveness.

As the Tinubu administration enters its fourth year, manufacturers say the true test of its reform agenda will be reflected not in the number of initiatives announced, but in the revival of factory activity, expansion of local value chains, job creation and sustained growth in industrial output.

For now, MAN’s verdict is that while several policies show promise and could transform the industrial landscape if effectively implemented, manufacturers are yet to see those initiatives translate into the broad-based industrial growth needed to reposition the sector as a major driver of Nigeria’s economic development.

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By Obas Esiedesa

Nigeria lost an estimated $839.22 million in oil revenue in the first four months of 2026 after failing to meet its 1.5 million barrels per day (mbpd) crude oil production quota set by the Organisation of Petroleum Exporting Countries (OPEC), findings by  Financial Vanguard  have shown.

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However, the country recorded a success last month with a total oil production, comprising crude oil and condensates, increasing by 2.2 per cent to 1.70 million barrels per day (bpd), while crude oil output exceeded the country’s OPEC production quota for the first time in nearly one year.

Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that combined oil production rose from 1.66 million bpd in April to 1.70 million bpd in May.

The commission reported that crude oil production averaged 1.53 million bpd during the month, surpassing Nigeria’s OPEC quota of 1.5 million bpd by two per cent and marking the first time the country has met and exceeded its allocation in 2026.

The May 2026 production figures represent the highest combined crude oil and condensate output since July 2025, when production reached 1.71 million bpd. In crude oil alone, the 1.53 million bpd recorded last month is the highest level since January 2025, a 15-month high.

Weak output

Data obtained from NUPRC and the Central Bank of Nigeria (CBN) showed that the country have been recording significant shortfalls in both OPEC quota and 2026 budgeted output benchmark month-on-month to April this year, limiting its ability to take advantage of higher crude oil prices driven by the Middle East crises so far this year.

Details of oil output reports by both OPEC and CBN showed that in January, Nigeria produced 45.236 million barrels of crude oil, representing an average daily output of 1.459 mbpd. This translated into a production shortfall of 1.264 million barrels for the month.

With Bonny Light crude trading at an average of $68.05 per barrel, according to CBN data, the country recorded an estimated revenue loss of $86.02 million.

In February, crude oil production dropped to 36.783 million barrels, averaging 1.313 mbpd. This resulted in a monthly shortfall of 5.217 million barrels and an estimated revenue loss of $377.35 million, based on an average crude price of $72.33 per barrel.

For March, Nigeria recorded a production shortfall of 3.132 million barrels after producing 42.868 million barrels, equivalent to an average daily output of 1.386 mbpd. The shortfall translated into an estimated revenue loss of $332.27 million during the month.

Production improved in April, with output rising to 44.657 million barrels, or 1.488 mbpd. But the improvement still fell short of benchmarks, missing OPEC target by 0.344 million barrels, resulting in an estimated revenue loss of $43.59 million.

CBN data also indicated that oil exports remained weak during the period, averaging less than one million barrels per day for most of the first four months of the year.

Oil exports stood at 1.01 mbpd in January but declined by 14.8 percent to 0.86 mbpd in February. Exports improved marginally to 0.93 mbpd in March before rising to 1.04 mbpd in April.

2026 budget under threat

Findings by  Financial Vanguard  further showed that the persistent production shortfalls could undermine the implementation of the 2026 budget, which is benchmarked on crude oil production of 1.8 mbpd.

Available data indicate that average crude oil and condensate production stood at 1.58 mbpd in the first four months of the year, significantly below the budget benchmark.

NUPRC figures showed that total average daily production was 1.627 million barrels in January, 1.483 million barrels in February, 1.546 million barrels in March, and 1.663 million barrels in April.

The cumulative revenue loss from the monthly figures is approximately put at $839.23 million by the data.

Challenges

Speaking on the development, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, hinted that the Federal Government’s drive towards massive investments in the sector may have failed to materialize.

He also attributed the production shortfalls to traditional challenges of persistent crude oil theft and pipeline vandalism.

According to him, while security interventions have helped improve production levels compared to previous years, Nigeria still faces significant challenges in attracting the scale of investment required to sustain higher output levels.

Industry analysts have similarly linked the country’s inability to consistently meet its OPEC quota to underinvestment in upstream infrastructure, and operational challenges in key producing fields.

Despite recent improvements in output, concerns remain over Nigeria’s capacity to sustain production levels at or above its OPEC quota in the months ahead and achieve the ambitious production target underlining the 2026 budget.

More expert insights

A petroleum sector governance expert, Henry Adigun, attributed Nigeria’s inability to meet its OPEC production quota and the 2026 budget benchmark to persistent crude oil theft, pipeline vandalism, inadequate investment and structural challenges in the upstream sector.

Speaking with  Financial Vanguard, Adigun noted that while government reforms under the Petroleum Industry Act (PIA) have improved the fiscal environment for investors, production growth cannot occur overnight due to the long lead time required for investment decisions and field development.

According to him, Nigeria’s production challenges extend beyond pricing and market conditions, as operators must contend with security concerns and infrastructure constraints that continue to discourage investment.

“To sell more, you have to produce more. The capacity to produce more depends on several factors. One is the fiscal regime, which is much better now than it used to be. The second is investment in the sector, while the third is the high level of crude oil theft taking place in Nigeria,” he said.

Adigun explained that increasing crude oil output requires significant capital expenditure and long-term planning by operators, adding that higher oil prices alone do not automatically translate into increased production.

“The whole idea of the PIA was to incentivise production. A lot of the amendments made through executive orders were also designed to encourage investment and boost output. However, you cannot simply switch gears overnight and start producing more oil.

“If your rig count is low and prices suddenly rise, companies will not immediately commit fresh investments because they are uncertain how long those prices will remain attractive. Moving drilling rigs from one location to another country takes time and involves significant costs,” he stated.

He noted that despite improvements in the regulatory framework, substantial investment opportunities remain untapped across the industry.

“There are still many marginal fields lying fallow and not being exploited. Several asset sales and commercial agreements have also not been concluded. While we have made progress on the fiscal side, transparency in the sector is still not where it ought to be, and the overall investment climate can improve further,” he said.

Adigun further clarified that condensate production, which is often included in Nigeria’s total liquids output, differs from crude oil production and is not counted under OPEC’s crude oil quota system.

According to him, condensate is a valuable hydrocarbon associated with natural gas production and commands strong demand in the international markets because it requires less refining than conventional crude oil.

He stated: “Condensate is a very valuable product. In many cases, refineries would rather buy condensate because it requires less processing.

“However, OPEC does not include condensate in its crude oil production quota calculations, which is why there is often a difference between Nigeria’s total liquids production and its official crude oil output”.

Adigun expressed doubts that Nigeria would achieve the 1.8 million barrels per day oil production benchmark contained in the 2026 budget, despite recent improvements in output levels.

“What we put in the budget was 1.8 million barrels per day, but I do not think we are going to get there this year. Production is improving, but the structural issues affecting investment, security and field development mean that achieving that target will remain difficult,” he added.

In a note to Vanguard, Partner at Kreston Pedabo, a professional services consulting firm, Mr. Olufemi Idowu, stated that but for the persistent challenges hampering growth in Nigeria’s oil and gas sector, the country could have earned significantly more from the recent rise in crude oil prices.

According to him, “Nigeria should ordinarily be earning more from the recent surge in global crude prices, but unfortunately, we have struggled to take advantage because the same long-standing problems continue to hold production down.

“For instance, crude theft and pipeline vandalism continue to disrupt oil output. Ageing infrastructure also limits production capacity, while years of underinvestment mean many fields are not producing at the levels they should. Even with the reforms that have been introduced on paper, operators still face uncertainty and delays that make it difficult to respond quickly when market conditions become favourable.”

Idowu noted that addressing the situation would require a combination of improved security, increased investment, and policy consistency.

He stated further: “Securing pipelines and export routes is critical because no investor will commit substantial capital when losses remain high. Addressing joint venture funding bottlenecks, accelerating regulatory approvals, and providing operators with confidence that policies will remain stable would help unlock stalled projects.

“If Nigeria can stabilise the operating environment and attract renewed investment into deepwater and brownfield assets, production is likely to increase. Strengthening domestic refining capacity would also reduce losses and ensure that more value is retained within the economy.

“All these challenges make the current situation appear to be a missed opportunity.

“With a sizable deficit projected in the 2026 budget, higher production during this period of elevated oil prices could have provided much-needed fiscal relief, boosted foreign exchange earnings, and reduced borrowing pressures. Instead, it appears the government is watching a favourable market cycle pass by without fully benefiting from it.

“The window of opportunity has not completely closed, but the country cannot afford to continue repeating this pattern.

“Addressing these structural constraints is the only way to ensure that future opportunities are fully harnessed”. 

Vanguard News

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By Emeka Anaeto, Business Editor

Nigeria’s leading economists and financial experts have disagreed with some of the latest policy prescriptions by the International Monetary Fund, IMF, for Nigeria, even as they endorsed the Fund’s warning against the Federal Government’s proposed $5 billion loan from a bank in Abu Dhabi.

Highlights of the IMF positions contained in its 2026 Article IV Mission Concluding Statement include a warning against the plan of the Federal Government (FG) to borrow $5b from First Abu Dhabi Bank of United Arab Emirate (UAE) saying that it comes at a dangerous collateral amounting 133.3% of the loan.

Other high points of the IMF statement include that Nigeria should raise its VAT rate because it is still low compared to other countries within the region; CBN should continue monetary tightening since inflationary pressures have returned; CBN should guard against excessive reliance on portfolio investments; FG should step up funding cash transfers program as poverty rate is increasing; Inflation is going to moderate in the second half of this year; reforms have strengthened macroeconomic stability; FG’s budgetary spending should be more transparent; and FG’s 2026 deficit to be around 4.4% of 2025 GDP.

The Federal Government has described the IMF statement on Nigeria as a validation of its economic reform programme, with the Minister of Finance and Coordinating Minister of the Economy,  Mr. Taiwo Oyedele, stating, “The report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu, are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth.”

Concerns over borrowing justified – Muda Yusuf 

The Chief Executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, has backed IMF’s concerns over Nigeria’s proposed $5 billion borrowing from First Abu Dhabi Bank, stressing the need for greater caution in the country’s debt accumulation strategy.

Commenting on the IMF’s Article IV report Yusuf said he strongly agreed with the Fund’s emphasis on debt sustainability and prudent fiscal management, noting that the country’s growing debt-service burden remains a major source of concern.

According to him, while Nigeria’s debt-to-GDP ratio may appear relatively moderate, the more critical issue is the proportion of public revenue being committed to debt servicing.

“A substantial share of public revenue is now devoted to debt-service obligations, leaving less fiscal space for infrastructure, healthcare, education, security and other growth-enhancing investments,” he said.

Yusuf noted that fiscal sustainability should not be measured solely by the size of public debt but by the government’s capacity to service such obligations without undermining critical development priorities.

He therefore shared IMF’s reservations about the proposed $5 billion facility from First Abu Dhabi Bank, urging the government to carefully assess the cost, tenor, repayment terms, currency risks and developmental impact of the loan before proceeding.

According to the CPPE boss, Nigeria should prioritise affordable and concessional financing while ensuring that any new borrowing is channelled into productive investments capable of generating economic returns, boosting exports and strengthening future revenue streams.

“Borrowing should support growth, not merely increase future debt-service pressures,” he stated.

Yusuf also called for a more balanced policy mix, arguing that while tight monetary policy has contributed to exchange-rate stability and inflation moderation, elevated interest rates are constraining investment, business expansion and job creation.

Also commenting on the IMF’s position, Head of Equity Research at Quest Merchant Bank, Mr. Tunde Abidoye, supported the Fund’s reservations on the proposed UAE loan, describing the transaction as risky.

According to him, the loan is structured as a total return swap, a derivative instrument that exposes the country to significant volatility.

“The IMF is right on this. Since the loan is essentially a derivative, it entails significant volatility which could crystallise through margin calls in the event of adverse shocks such as a sharp drop in oil prices. While it provides immediate liquidity, the risks are substantial,” he said.

Also commenting, Chief Economist at United Capital Plc, Mr. Ayodele Akinwunmi, took a different position on external borrowing, saying foreign loans could be beneficial if deployed to productive infrastructure projects.

“Nigeria’s current macroeconomic environment presents a compelling case for external borrowing, provided such funds are channelled into infrastructure development. Expectations of a stable naira, relatively lower international interest rates and concessionary loan terms make external financing attractive at this time,” he said.

Commenting on the counsel by the IMF against borrowing,  David Adonri,  Analyst and Executive Vice Chairman at High Cap Securities Limited, said: “IMF’s counsel to FGN against borrowing whether from Abu Dhabi or any other foreign country is reasonable. However, I doubt if FGN will heed the advice because being in debt trap, FGN requires new foreign debt to service existing obligations. Otherwise, a sovereign default with dire consequences may become imminent.”

VAT increase

On the IMF’s recommendation for a VAT increase, Abidoye disagreed, arguing that Nigerians have already borne the burden of recent reforms.

“VAT provides an easy avenue for governments, particularly sub-national governments, to increase revenue. However, Nigerians have absorbed significant reform-induced pressures over the past three years. I do not think the timing is right for a VAT increase,” he stated.

However, Akinwunmi joined Abidoye in rejecting the IMF’s call for a VAT increase.

“What Nigeria needs is not higher tax rates but broader tax compliance. Expanding the number of individuals and institutions paying taxes will strengthen government revenue without stifling growth,” he stated.

On the recommendation given by the IMF to raise VAT, Adonri said: “IMF’s advice to FGN to raise VAT in order to equalize with neighboring countries is unacceptable. The reason is too pedestrian. Taxation is a serious fiscal tool aimed at specific strategic imperatives of the economy. VAT is a consumption levy that can worsen the poverty level of consumers. This is the time for relief and not extra burden.

Monetary tightening, inflation

On monetary policy stance Abidoye argued that although inflationary pressures may eventually compel the Central Bank of Nigeria, CBN, to tighten monetary policy further, an immediate rate hike may not be necessary.

“The current inflationary pressure is largely driven by supply-side energy shocks. Monetary policy can do little to address first-round effects. Central banks usually respond after a few months to contain second-round effects,” he explained.

On monetary policy, Akinwunmi said the current stance of the CBN remains appropriate, warning that additional rate hikes could undermine economic growth.

According to him, inflation is likely to remain in double digits in the second half of the year due to elevated oil prices, election-related spending and persistent security challenges.

He said: “The Central Bank is unlikely to lower rates hastily because inflationary pressures remain significant. However, raising rates further may be counterproductive under present conditions.”

On monetary policy tightening, Adonri said: “The IMF recommendation is justifiable. CBN loosened monetary policy prematurely because the policy objective of forcing inflation rate to single digit had not been achieved when money supply was increased.”

Speaking on inflation Adonri said: “Official figures indicate that inflation is moderating and will continue into the future but the reality on ground shows otherwise. Macroeconomic reforms have stabilized the demand side of the economy as they were majorly demand management policies but the structural reforms necessary to propel the supply side are yet to be forcefully embarked upon. The most critical element which is restoration of national security is callously treated with levity. Instead of focusing on foundational production infrastructure, fiscal policy is centered on secondary infrastructure. As a result, the economy remains heavily import dependent and unable to generate productive employment.”

Dependence on FPIs

Both Abioye and Akinwunmi agreed with the IMF’s position that Nigeria should reduce excessive dependence on Foreign Portfolio Investment (FPI) and attract more productive Foreign Direct Investment (FDIs) capable of supporting long-term economic growth.

While supporting social intervention programmes, they stressed the need for effective targeting and complementary investments in skills acquisition to create sustainable livelihoods for vulnerable Nigerians.

Their views came as the IMF maintained that Nigeria’s economic reforms have strengthened macroeconomic stability and projected that inflation would moderate in the second half of the year despite persisting pressures.

Commenting on FPI, Adonri said: “Portfolio Investment is hot money which is very volatile. What the economy needs now is patient capital (FDI) to boost the supply side of the economy.”

Babajide Komolafe, Peter Egwuatu and Yinka Kolawole contributed to this report

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