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 as a positive development, but warned that the marginal decline has yet to translate into lower production costs for manufacturers.
This was contained in a position paper issued and signed by the Director-General of MAN, Mr Segun Ajayi-Kadir, and made available to The Revealer.
The National Bureau of Statistics (NBS) reported that headline inflation declined marginally from 15.43 per cent in July to 15.39 per cent in August, representing a decrease of 0.04 percentage points.
MAN said the downward movement was encouraging, noting that greater price stability was important for business planning, investment decisions and consumer welfare.
However, the manufacturers’ body cautioned that the improvement remained fragile, stressing that a reduction in the headline inflation rate should not be interpreted as an automatic reduction in the cost of doing business.
According to the association, manufacturers continue to contend with high energy costs, logistics constraints, exchange-rate-related costs, elevated raw-material prices, as well as multiple fiscal and regulatory charges.
MAN said the critical concern for the manufacturing sector was not simply whether headline inflation was declining, but whether the cost of producing goods was also falling.
The association noted that persistent production-cost pressures were squeezing manufacturers’ margins because weak consumer purchasing power limited their ability to fully pass higher costs on to consumers.
It added that rising input prices were also increasing manufacturers’ working-capital requirements, as businesses needed more funds to purchase the same volume of raw materials.
MAN further warned that high energy, financing and logistics costs were making manufacturers cautious about new investments and could constrain capacity utilisation.
“Some firms may reduce production when the cost of operating additional shifts or purchasing additional inputs becomes commercially unsustainable,” the association said.
It also raised concerns about the competitiveness of locally manufactured goods, noting that high domestic production costs could make Nigerian products less competitive against imported goods, particularly where imported products enter the market at lower costs.
The association warned that sustained cost pressures could also limit manufacturers’ ability to expand production and create additional employment.
While acknowledging the modest improvement in the August inflation figures, MAN said sustainable economic growth required more than a gradual decline in headline inflation.
It urged the Federal Government to use the period of relative inflation moderation to implement targeted measures capable of reducing production costs and improving productivity.
Central to the association’s recommendations is a reduction in the cost of industrial energy. MAN called for dedicated and reliable electricity supply to major industrial clusters, priority access to gas for industrial users, and incentives for manufacturers investing in efficient captive power and renewable-energy systems.
It also advocated a review of electricity tariff structures affecting productive industries, arguing that the effectiveness of energy policy should ultimately be measured by the cost of energy required to produce a unit of manufactured output.
On transportation, MAN noted that the sector contributed 1.64 percentage points to inflation and called for the identification and rehabilitation of major transport corridors linking ports, industrial clusters, agricultural production zones and major markets.
The association also urged the Federal Government to collaborate with state governments to eliminate unnecessary road charges and overlapping transport-related levies.
On taxation, MAN called for effective implementation of the relevant provisions of the new tax laws to promote equity, fairness and transparency, while eliminating multiple taxation and overlapping levies.
It cautioned that tax reforms should not impose additional fiscal burdens on local production.
The manufacturers also called for effective implementation of the Nigeria First Policy to promote the procurement and consumption of locally manufactured goods, particularly in government procurement.
In addition, MAN recommended the introduction of a targeted, long-term manufacturing financing window at below-market interest rates to support working capital, machinery acquisition and productivity-enhancing investments, particularly for micro, small and medium-sized manufacturing enterprises.
The association said the objective of policy intervention should ultimately be to enable Nigerian manufacturers to produce more at lower cost, attract greater investment, create more jobs and compete more effectively in domestic and international markets.
