As Nigeria's manufacturing sector prepares to bounce back from challenging economic conditions, industry leaders are forecasting a robust turnaround in 2026 with ambitious growth targets and strategic policy implementations.

The Manufacturers Association of Nigeria (MAN) and the Centre for the Promotion of Private Enterprise (CPPE) are projecting a remarkable 3.1% real growth rate for the manufacturing sector, with expectations of contributing 10.2% to the nation's real Gross Domestic Product. This optimistic outlook hinges critically on the effective execution of new tax incentives and the comprehensive 'Nigeria First' policy framework.

MAN's Director-General, Segun Ajayi-Kadir, highlighted the sector's potential for gradual recovery, emphasizing that the projected growth depends on strategic policy reforms. These include operationalizing the National Single Window Project and aligning industrial policies with national economic priorities.

Economic indicators supporting this projection are equally promising. The naira is expected to appreciate to between N1,300 and N1,400 against the US dollar, driven by recovering global oil prices, strengthened external reserves, and increased foreign investments. Inflation is anticipated to moderate to 14%, supported by stabilizing food prices and energy costs.

The Central Bank of Nigeria is also expected to play a supportive role by potentially reducing the Monetary Policy Rate to approximately 23%, which would stimulate credit expansion and enhance manufacturing output. Lower lending rates and ongoing banking sector recapitalization are projected to improve credit access for manufacturers.

Dr. Muda Yusuf from CPPE cautioned that while macroeconomic fundamentals are improving, structural challenges in energy, logistics, and ports remain significant. He noted that firms demonstrating backward integration, reduced foreign exchange exposure, and alignment with domestic input sourcing are likely to achieve stronger investment returns.

The overall economic outlook remains positive, with projected GDP growth of about 4% in 2026. This growth is expected to be driven by higher oil output, improved fiscal space, expansion in financial and manufacturing sectors, and increased consumption during the anticipated election campaigns in the fourth quarter.