…CPPE says risks must be addressed to drive competitiveness
Nigeria’s structural risks are seen threatening manufacturing growth in 2026 as firms start reaping the benefits of reforms, the Centre for the Promotion of Private Enterprise (CPPE) has said.
Muda Yusuf, chief executive officer of the CPPE, stressed that without addressing these structural risks, the country’s manufacturing will remain uncompetitive in 2026 despite the current macroeconomic stability.
Yusuf, who stated this in a note titled ‘Nigeria’s Manufacturing Sector: Outlook, Risks and Policy Priorities (2026),’ explained that these bottlenecks cannot be resolved within a single fiscal year, noting that expectations for the sector in 2026 must be carefully managed.
“If reforms in power, trade, and development finance are effectively implemented, the sector’s growth prospects and competitiveness will be significantly enhanced in 2026 and beyond,” he said.
He listed the major structural changes facing the country’s manufacturing to include inadequate and costly infrastructure, particularly power and logistics; port inefficiencies and supply chain bottlenecks; high cost of energy, driven by reliance on captive power and unfavourable regulatory and business environment.
Others are unfair competition from cheap imports, especially from Asia, the high cost of funds, the absence of long-tenured financing, and weak consumer purchasing power.
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Yusuf noted that the challenges confronting Nigeria’s manufacturing sector have remained largely unchanged over the years, saying “they are predominantly structural, not cyclical, and therefore require medium to long-term solutions rather than quick fixes.”
He stressed that these constraints have continued to undermine competitiveness, investment returns and industrial growth.
“These issues have kept manufacturing costs high and weakened competitiveness relative to imported goods,” he said, adding that “without addressing these risks, Nigeria’s manufacturing sector will remain structurally uncompetitive,” he said.
According to him, the improving macroeconomic fundamentals are expected to support better manufacturing outcomes in 2026, especially for firms that are backward integrated and better aligned with domestic input sourcing.
“These segments are likely to record stronger returns on investment under current reform conditions,” he said.
He also noted that the relief is that while these structural constraints have continued to persist, the macroeconomic environment has improved notably over the past year.
He explained that greater foreign exchange market stability, with prospects of gradual appreciation and the deceleration in inflation, could eventually translate into lower interest rates.”
He advised the government to “maintain FX market stability and reform momentum, avoid disruptive policy reversals, strengthen gas supply, generation, transmission, and distribution.
He said that the government should empower Development Finance Institutions to provide lower-cost funds, longer tenors suited for manufacturing, which is essential to address clear market failures in commercial finance.
“Protect domestic manufacturers without harming consumer welfare. Encourage competition among manufacturers, not between manufacturers and importers.”
Yusuf said that the policy priorities for 2026 should be sustained macroeconomic stability, fixing the power sector value chain, improving access to long-term funds, deployment of smart trade and protection policies and deepening the ‘Nigeria First’ policy implementation.
He also urged the federal government to move beyond rhetoric to enforcement of the Nigeria First policy by using “public procurement at federal and state levels to prioritise Made-in-Nigeria goods.”
