The Manufacturers Association of Nigeria (MAN) has warned that escalating tensions in the Middle East, particularly the US-Iran conflict, pose significant risks to Nigeria’s manufacturing sector, threatening growth projections and operational stability.
Director-General of MAN, Segun Ajayi-Kadir, disclosed this in a statement on Monday, noting that the sector is already grappling with the ripple effects of a global energy shock triggered by the crisis.
He said the development could derail the sector’s projected 3.1 per cent real growth target for 2026, as rising crude oil prices continue to push up domestic energy costs.
According to Ajayi-Kadir, manufacturers’ heavy reliance on gas and Automotive Gas Oil (diesel) has exposed them to escalating production costs, significantly eroding profit margins.
“Energy cost escalation is biting hard. Many manufacturers are seeing their margins wiped out almost overnight,” he said.
The MAN boss further highlighted the impact of imported inflation and rising freight costs, explaining that extended shipping timelines and higher logistics expenses are making it increasingly difficult for manufacturers to source critical raw materials.
“The implication is clear — production costs are rising sharply, while consumer purchasing power is weakening. This has created a situation where manufacturers are battling both high costs and unsold inventories,” he added.
Ajayi-Kadir warned that the dual challenge of soaring production expenses and declining demand could undermine industrial output and stall sectoral growth.
To mitigate the impact, MAN called on the Federal Government to implement urgent policy interventions, including fast-tracking the Presidential Compressed Natural Gas (CNG) initiative to reduce dependence on diesel.
The association also urged the creation of a dedicated foreign exchange window by the Central Bank of Nigeria for manufacturers to import essential inputs.
In addition, MAN advocated the domestication of petroleum supply chains, calling for local refineries to prioritise supply to domestic industries at competitive rates.
It also recommended a temporary suspension of multiple taxation, logistics levies and haulage charges to ease the burden on manufacturers.
“The current crisis highlights Nigeria’s vulnerability to external shocks due to dependence on imported inputs,” Ajayi-Kadir said.
“While global geopolitics may be beyond our control, our domestic response must be deliberate and strategic,” he added.
He stressed that the situation presents an opportunity for Nigeria to strengthen local production capacity and move towards manufacturing self-sufficiency.
Ajayi-Kadir warned that failure to act decisively could lead to widespread factory closures, job losses and a major setback to the country’s industrialisation drive.
