KEY POINTS

• MAN DG Segun Ajayi-Kadir warned the US-Iran conflict is driving up energy and freight costs in ways that threaten the sector’s 3.1 percent real growth target for 2026
• Rising global crude prices are eroding manufacturing margins through higher gas and diesel pump prices, while extended shipping times are making raw material imports increasingly expensive
• MAN urged the government to fast-track the CNG initiative for industrial clusters, open a CBN forex window for critical inputs and suspend haulage levies for six months

Segun Ajayi-Kadir, Director General of the Manufacturers Association of Nigeria, warned Monday that the US-Iran conflict is pushing energy and freight costs to levels that threaten factory viability across Nigeria.

Ajayi-Kadir said the Nigerian manufacturing sector’s projected 3.1 percent real growth target for 2026 is now under serious threat as rising global crude prices drive up domestic pump prices for gas and diesel, the two fuels manufacturers depend on most for production. “Energy cost escalation is biting hard. Many manufacturers are seeing their margins wiped out almost overnight,” he said.

Supply chain pressures compound the energy crisis

Beyond energy, Ajayi-Kadir noted that extended transit times and higher shipping expenses have made importing critical raw materials increasingly expensive.

He said manufacturers now face a dual threat: skyrocketing production costs alongside unsold inventories, a combination that could derail the sector’s growth targets.

“Production costs are rising sharply, while consumer purchasing power is weakening,” he said.

Nigerian manufacturing sector urges government to fast-track CNG initiative

To cushion the impact, MAN called on the Federal Government to fast-track the Presidential Compressed Natural Gas initiative for industrial clusters as a way to cut diesel dependence. The association also urged the Central Bank of Nigeria to open a dedicated foreign exchange window for the importation of critical inputs, and asked local refineries to prioritize domestic supply at competitive rates.

Moreover, MAN recommended a six-month suspension of multiple haulage levies, highway taxes and transit tolls imposed on the Nigerian manufacturing sector. Indeed, Ajayi-Kadir framed the crisis as an opportunity for structural change, warning that failure to act could trigger widespread factory closures and mass job losses. “We cannot control global geopolitics, but we can control our domestic response,” he said.