Nigeria’s manufacturing sector stays weak as high costs keep PMI barely above 50
Nigeria’s manufacturing PMI rose slightly to 50.10 in June 2026 from 49.6 in May, but remained barely above the 50-point threshold that separates expansion from contraction, with more firms reporting declines in output, new orders and production than gains. Analysts cite persistent high energy costs, elevated interest rates at 26.5% MPR, and stubborn raw material prices as key constraints, despite improved foreign exchange liquidity and external reserves above $52 billion. Manufacturing’s contribution to real GDP rose to 9.57% in Q1 2026 from 7.40% in Q4 2025, yet firms say high diesel and petrol prices, taxation, and import waiver compliance issues are pushing some to consider shutdowns. The sector’s weakness could drag on broader economic performance given its role in employment, value addition and non‑oil exports.
Analysts urge manufacturers to explore alternative energy sources, negotiate better financing terms, deepen local sourcing to cut forex exposure, and engage policymakers on tax and waiver reforms to lower operating costs. With consumer demand remaining weak, businesses may also need to adjust product mix or pricing strategies to stay viable.
Given high energy and financing costs, will you adjust your production mix, seek alternative power sources, or wait for policy relief before expanding operations?