By Yinka Kolawole
The Manufacturers Association of Nigeria (MAN) has described the further moderation in Nigeria’s headline inflation rate to 15.39 per cent in August 2026, from 15.43 per cent in July, as a positive but fragile development, urging the Federal Government to shift attention from merely managing inflation to tackling the structural costs that make local manufacturing expensive.
In a statement on Friday, MAN Director-General, Segun Ajayi-Kadir, said the marginal 0.04 percentage-point decline was important for business planning, investment and consumer welfare. However, he noted that a lower inflation rate does not necessarily translate into lower production costs for manufacturers.
According to the association, manufacturers continue to contend with high energy costs, logistics challenges, foreign exchange-related expenses, elevated raw material prices and multiple fiscal and regulatory charges.
“The current inflation trend should therefore provide an opportunity for the government to implement measures that reduce the cost of production and improve productivity.
“Manufacturers are often unable to pass the full increase in production costs to consumers because of weak purchasing power, leaving profit margins under pressure and increasing working capital requirements,” Ajayi-Kadir stated.
He added that persistent high energy, financing and logistics costs were keeping investment decisions cautious, while some firms could be forced to reduce production where the cost of additional shifts or inputs becomes commercially unsustainable.
The development, MAN warned, could also weaken the competitiveness of locally produced goods against cheaper imports, constrain capacity utilisation and limit employment expansion.
To reverse the trend, MAN called for measures to reduce industrial energy costs, including dedicated electricity supply to major industrial clusters, priority gas access for industrial users, incentives for captive power and renewable energy investments, and a review of electricity tariff structures affecting productive industries.
The association urged the government to prioritise the rehabilitation of major transport corridors linking ports, industrial clusters, agricultural production zones and markets, while eliminating unnecessary road charges and overlapping transport levies.
It also recommended a targeted, long-term manufacturing financing window at below-market rates to support working capital, machinery acquisition and productivity-enhancing investments, particularly for MSME manufacturers.
MAN said the objective should be to create conditions that enable manufacturers to produce more at lower cost, attract greater investment, create jobs and compete more effectively.
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