Nigeria’s manufacturing sector continued to face prohibitively expensive credit in 2025, with the average interest rate on industrial loans standing at 32.1 per cent.

Although the figure represented an improvement from the 35.6 per cent average recorded in 2024, borrowing costs remained too high to support sustainable industrial expansion and long-term investment.

Data from the Manufacturers Association of Nigeria showed that the average lending rate was 32.5 per cent during the first half of 2025 before declining slightly to 31.8 per cent in the second half.

Despite the moderation, every major manufacturing segment surveyed by MAN recorded an average borrowing rate above 30 per cent.

Chemical and pharmaceutical manufacturers faced the lowest annual average rate at 30.4 per cent, followed by wood, furniture and related producers at 30.8 per cent.

Manufacturers of textiles, clothing, carpets, leather and footwear obtained loans at an average rate of 31.6 per cent.

Metal, iron, steel and fabricated-metal producers paid an average of 32.3 per cent, while electrical and electronics manufacturers faced a rate of 32.4 per cent.

The average borrowing rate for food, beverage and tobacco companies stood at 32.5 per cent. Plastic, rubber and foam manufacturers paid 32.6 per cent.

Motor vehicle and miscellaneous assembly companies recorded an average lending rate of 32.8 per cent. The pulp, paper, printing, publishing and packaging sector faced the same rate.

Non-metallic mineral-product manufacturers recorded the highest average borrowing cost at 33 per cent.

The high rate in the non-metallic mineral sector could have direct implications for Nigeria’s housing and construction industries because the segment produces important building inputs, including cement, ceramics, glass, tiles and related materials.

When manufacturers finance production, machinery, raw materials and expansion at interest rates above 30 per cent, part of the cost may eventually be transferred to consumers through higher product prices.

Elevated borrowing costs can also discourage companies from increasing capacity, upgrading equipment or developing new factories. This could further weaken local production and increase dependence on imported goods.

MAN attributed the slight reduction in lending rates during 2025 to improving economic conditions, including lower headline inflation, greater stability in energy prices and the appreciation of the naira.

However, the association maintained that the cost of credit remained a serious obstacle to manufacturing competitiveness and output growth.

Manufacturers require financing to purchase raw materials, maintain equipment, meet working-capital obligations and expand production. At prevailing commercial lending rates, many businesses may struggle to generate returns sufficient to cover their financing costs.

The situation is particularly concerning for small and medium-sized manufacturers, which generally have fewer financing options and weaker balance sheets than large corporations.

The figures suggest that Nigeria must move beyond modest reductions in commercial lending rates and develop more accessible, long-term industrial finance for productive sectors.

Without affordable credit, efforts to increase local manufacturing, reduce building-material costs, create jobs and improve the competitiveness of Nigerian products could remain constrained.

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HBM Nigeria Plc, formerly Lafarge Africa Plc, has reported a strong financial performance for the first half of 2026, recording a 31% increase in revenue and a 57% rise in profit after tax (PAT). The company attributed the growth to higher cement sales volumes, improved operational efficiency, and stronger distribution performance amid sustained demand for building materials.

According to the company’s unaudited financial results for the six months ended June 30, 2026, net sales rose to ₦678.4 billion, up from ₦517.0 billion in the corresponding period of 2025. Profit after tax climbed to ₦208.3 billion, while operating profit increased by 51% to approximately ₦291 billion, reflecting improved cost management and operational excellence.

HBM Nigeria said revenue growth was supported by an 11% increase in sales volume, enhanced plant stability, improved logistics, and continued demand from infrastructure and construction projects across the country. The company also recorded stronger operating margins, which rose from 37% in H1 2025 to 43% in H1 2026, highlighting gains in production efficiency and disciplined cost control.

The company noted that its cement business remained the primary revenue driver, accounting for the vast majority of total sales during the period. It added that strategic investments in operational improvements and distribution efficiency continue to strengthen its competitive position within Nigeria’s building materials industry.

Looking ahead, HBM Nigeria said it remains focused on expanding production capacity, maintaining operational excellence, and creating long-term value for shareholders. The company is also progressing plans for a new three-million-tonne integrated cement production line in Calabar, a project expected to strengthen domestic cement supply and support Nigeria’s growing infrastructure and housing sectors.

Industry analysts say HBM Nigeria’s strong half-year performance reflects continued resilience in the construction materials market despite broader economic challenges. They note that sustained investment in cement production and operational efficiency will remain critical to meeting rising demand from housing, commercial real estate, and infrastructure development across Nigeria.

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Nigeria’s Value Added Tax (VAT) revenue increased to N2.42 trillion in the first quarter of 2026, representing a 9.98 per cent rise from the N2.20 trillion recorded in the fourth quarter of 2025.

This is according to the latest VAT Q1 2026 report released by the National Bureau of Statistics (NBS).

The report showed that local VAT payments accounted for N1.11 trillion of the total collections, while foreign VAT contributed N830.47 billion and import VAT generated N477.55 billion during the period.

On a quarter-on-quarter basis, activities of households as employers and undifferentiated goods- and services-producing activities for own use recorded the highest growth rate at 74.36 per cent. This was followed by arts, entertainment and recreation, which grew by 20.91 per cent, and manufacturing, which expanded by 12.82 per cent.

However, the education sector posted the sharpest decline, falling by 31.96 per cent. Public administration and defence, including compulsory social security activities, declined by 31.38 per cent, while activities of extraterritorial organisations and bodies dropped by 29.89 per cent.

In terms of sectoral contributions, manufacturing remained the largest contributor to VAT revenue, accounting for 29.75 per cent of total collections during the quarter.

The information and communication sector followed with a contribution of 20.61 per cent, while mining and quarrying contributed 12.32 per cent.

Conversely, activities of households as employers and undifferentiated goods- and services-producing activities for own use recorded the lowest share at 0.01 per cent. Activities of extraterritorial organisations and bodies contributed 0.02 per cent, while water supply, sewerage, waste management and remediation activities accounted for 0.06 per cent.

On a year-on-year basis, VAT collections rose by 17.06 per cent compared to the corresponding period in 2025, highlighting continued growth in government tax revenue despite varying performances across economic sectors.

The latest figures underscore the growing role of manufacturing, telecommunications and extractive industries in driving Nigeria’s non-oil tax revenue as authorities continue efforts to strengthen domestic revenue mobilisation.

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Dangote Cement has posted an impressive ₦2.07 trillion in revenue for the first six months of 2025, setting the pace for another record year in Nigeria’s manufacturing sector. The company achieved this milestone despite lower sales volumes and higher operating expenses, underlining its pricing strength and resilience.

With revenue for H1 2025 already accounting for more than 57% of last year’s full turnover, the company has reinforced its position as Africa’s largest cement producer.

Operations and Structure
Dangote Cement runs its business through two core divisions:

• Nigeria Operations – overseeing domestic production, sales, and distribution.

• Pan-Africa Operations – covering subsidiaries in more than nine countries, exporting cement and clinker to meet regional demand.

Its main plants are located in Obajana (Kogi State), Gboko (Benue State), and Ibese (Ogun State), supplying millions of tonnes of cement annually.

Key Drivers of Growth

Revenue rose 17.7% year-on-year, climbing from ₦1.76 trillion in H1 2024 to ₦2.07 trillion in H1 2025. This growth came even as volumes dropped 4.08% to 13.37 million tonnes, showing that higher pricing and resilient demand outweighed lower output.

The company maintained strong operational efficiency, with an inventory turnover of 1.23x and a receivables turnover of 14.61x, reflecting faster sales and payments.

Regional and Product Performance

Cement and clinker sales made up 99.99% of total revenue, confirming the company’s reliance on its core product. By geography:

• Nigeria: ₦1.44 trillion (67.89%)

• Pan-Africa: ₦682.12 billion (32.11%)

Nigeria’s share rose from 55.12% in H1 2024, while Pan-African contribution declined slightly due to eliminations and softer demand.

Profitability Gains

Operating profit surged 47% year-on-year to ₦810.98 billion, while pre-tax profit soared 149% to ₦730.03 billion. Gross profit stood at ₦1.22 trillion, with a margin of 58.8%.

Finance costs dropped significantly to ₦102.91 billion from ₦307.72 billion, supported by a quadrupling of finance income. Net income margin jumped to 25.12%, compared to 10.79% last year.

Liquidity and Market Standing

Receivables grew 43% to ₦166.98 billion, inventories rose 6.96% to ₦716.29 billion, while cash and cash equivalents fell 14.66% to ₦383.90 billion.

In Nigeria, Dangote Cement remains the market leader against BUA Cement and Lafarge Africa. Globally, it competes with LafargeHolcim and HeidelbergCement, but its domestic scale gives it unmatched dominance.

Bottom Line
Dangote Cement’s half-year performance highlights its role as the backbone of Nigeria’s construction sector and a key player in Africa’s industrial growth. Turning ₦2.07 trillion sales into ₦730 billion profit in six months demonstrates the strength of its model balancing scale, pricing power, and efficiency.

The company continues to prove why it is Africa’s cement powerhouse.

Source: Nairametrics

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The Bank of Industry (BOI) has announced the disbursement of N22.89 billion to 29 manufacturers, as the Nigerian manufacturing sector continues to grapple with low sales and surging production costs.

BOI Managing Director, Dr. Olasupo Olusi, disclosed this on Monday during the bank’s inaugural interactive session with the Organised Private Sector in Abuja.

Dr. Olusi revealed that the disbursement is part of a N75 billion manufacturing sector intervention fund, with an additional 20 projects valued at N6.3 billion currently at various stages of funding.

The interactive session aimed to foster dialogue and strategies to boost industrial development and support Small and Medium Enterprises (SMEs). Dr. Olusi emphasized the importance of collaboration between SMEs and the government to achieve sustainable growth and address systemic challenges.

“Recently, we signed a Memorandum of Understanding (MOU) with your esteemed associations. This agreement underscores a simple truth—we cannot transform Nigeria’s industrial landscape alone. The journey to sustainable economic growth must be fueled by collaboration, innovation, and a shared resolve to address systemic challenges,” he stated.

Dr. Olusi outlined the BOI’s commitment to providing not just financing but also an enabling environment for businesses to thrive. This includes addressing infrastructure deficits, regulatory hurdles, and market access challenges.

He added, “On collaborative innovation, we must work together to introduce technology, sustainability, and skills development as core pillars of SME growth. We are deeply concerned about your challenges and are dedicated to aligning our programmes with your needs.”

The Nigerian manufacturing sector has been significantly affected by economic instability. According to the Manufacturing Association of Nigeria (MAN), unsold inventory of finished goods increased from N350 billion in 2023 to N1.24 trillion in the first half of 2024.

The sector’s contribution to the Gross Domestic Product (GDP) also dropped from 16.04% in Q4 2023 to 12.68% in Q2 2024, according to the National Bureau of Statistics (NBS). MAN attributes these struggles to exchange rate volatility, inflation, and rising energy costs, which forced 767 manufacturing companies to shut down operations in 2023.

In response to these challenges, the federal government recently established an industrial revolution work group to revitalize the manufacturing sector.

The African Development Bank estimates that Nigerian SMEs face a funding gap of $160 billion. Industry leaders are calling for innovative partnerships to bridge this gap and stimulate economic growth.

The BOI’s latest initiative is a step in this direction, reflecting its commitment to addressing the pressing needs of manufacturers and SMEs amidst the country’s challenging economic landscape.

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