KEY POINTS

• The Manufacturers CEO Confidence Index rose to 52.1 points in Q2 2026 from 48.7 in Q1, returning to positive territory
• MAN said the rebound reflects hope in government reforms, not better current conditions, with business and employment readings still below 50 points.
• Manufacturers want the CBN to cut the 26.5 percent policy rate below 20 percent and prioritize foreign exchange for factories.

Manufacturers’ confidence in Nigeria rebounded in the second quarter of 2026, lifted by hopes for better government policy and a friendlier operating climate. However, factory operators still wrestle with high borrowing costs, unreliable power, foreign exchange shortages and multiple taxation.

According to the latest Manufacturers CEO Confidence Index from the Manufacturers Association of Nigeria, the aggregate reading climbed to 52.1 points in the second quarter, up from 48.7 points in the first quarter. As a result, sentiment crossed back above the 50-point mark that separates optimism from pessimism.

Optimism rests on promised reforms

MAN Director General Segun Ajayi-Kadir said the rebound reflected optimism about the direction of government reforms rather than any real gain in day-to-day conditions. Moreover, he tied the improvement to fresh policy measures, including the Nigeria Industrial Policy, the Nigeria First policy, Executive Orders 003 and 005, and the Nigeria Tax Act 2025. In his view, those reforms could ease multiple taxation and lighten the regulatory burden once agencies apply them fully.

Still, he warned that the optimism remains fragile. Although the headline index rose, actual business and employment readings stayed below the 50-point threshold, which points to subdued activity. Consequently, manufacturers expect brighter days, yet they have not felt the turn on the ground. Even so, the forward-looking mood marks a clear shift from the weaker sentiment of early 2026.

Costs and power keep pressure high

Meanwhile, Ajayi-Kadir listed the main constraints as limited access to finance, persistent electricity shortages, high production costs, scarce foreign exchange, weak consumer demand and multiple taxation. Furthermore, he criticized the cost of bank credit, which he linked to the Central Bank of Nigeria’s monetary policy rate of 26.5 percent. Because commercial lending rates stay so high, he argued, manufacturers cannot easily fund investment or expansion.

He also flagged regulatory bottlenecks and uncertainty over how the Nigeria Tax Act 2025 will work in practice. In addition, he noted that local sourcing of raw materials improved, yet government agencies still buy too few Made-in-Nigeria goods. Therefore, he urged the government to enforce the rule requiring agencies to source at least 80 percent locally. Finally, he asked the central bank to cut its rate below 20 percent and steer more foreign exchange to manufacturers to spur production and industrial growth.