Report: Manufacturers Yet to Feel Significant Impact on Productivity from Increased Capital Spending
• Bemoans high interest rate on bank loans, blames CBN’s high MPR of 26.5 per cent
Dike Onwuamaeze
Chief executive officers (CEOs) of manufacturing companies in Nigeria have said government infrastructure spending has not significantly boosted their productivity.
The CEOs also objected to claims of improvements in foreign exchange sourcing and expressed dissatisfaction with the size and cost of credit from commercial banks. They raised concern about overregulation of business activities in Nigeria and uncertainty surrounding the implementation of the Nigeria Tax Act 2025, which might cast doubts on its expected benefits.
The CEOs also said the persistent gridlock at ports was constraining timely importation of materials for production plants.
They expressed the views in the Manufacturers’ CEOs Confidence Index (MCCI) report for the second quarter of 2026, which showed that the index gained 3.4 points by growing from 48.7 in the first quarter of 2026 to 52.1 in the second quarter.
MCCI is a publication of Manufacturers Association of Nigeria (MAN) that measures changes in the quarterly pulse of manufacturing activities in relation to movements in the macro-economy and government policies by aggregating the views of CEOs of manufacturing companies on changes in the economy.
The report said, “Manufacturers’ CEOs expressed dissatisfaction with the cost and size of credit from commercial banks to the manufacturing sector.
“They bemoaned high interest rates on bank loans, which they directly blamed on the CBN’s high MPR of 26.5 per cent.
“In addition, manufacturers claimed not to have felt a significant impact from government infrastructure on their productivity.
“This is somewhat understandable as capital expenditure takes time to generate substantial benefits for the real sector.
“Similarly, manufacturers objected to improvements in foreign-exchange sourcing, which have left them producing below their potential.
“Unlike the case of infrastructure, this cannot be excused, as the pass-through of Naira liberalisation should have matured after more than three years.”
The report added; “Manufacturing executives were still concerned about the overregulation of business activities in Nigeria.
“The uncertainty surrounding the implementation of the Nigeria Tax Act 2025 appeared to fuel doubts about the expected benefits of the tax reforms.
“While the persistent gridlock at ports constrained the timely importation of materials for production plants, manufacturers reported improvements in local sourcing.”
The MCCI said patronage of Nigeria-made products by Ministries, Departments and Agencies (MDAs) had not been incentivised.
“This has prevented inventories of manufactured products from falling noticeably,” the MCCI said.
The report said manufacturers reported a return of confidence in doing business in Nigeria within the second quarter.
It attributed the return to confidence to the expected commercial environment rather than the economy’s hitherto business and employment conditions.
The MCCI said the recent tax laws, executive orders, and other business-related policies (Nigeria Industrial Policy and “Nigeria First” Policy) gave a more positive outlook on manufacturing executive.
It recommended that Central Bank of Nigeria (CBN) should further reduce the Monetary Policy Rate (MPR) to below 20 per cent, especially for credit that flowed to the manufacturing sector.
The report also recommended an improvement in supply of foreign exchange for manufacturers who importing crucial machinery, spare parts, and materials for local production.
The report recommended that the federal government should give legal force to Executive Orders 003 and 005 in order to promote patronage of Made-in-Nigeria manufactured products.
It said Bureau of Public Procurement and Bureau of Public Enterprises should be implementing Nigeria Industrial Policy and “Nigeria First” policy by promoting patronage of Made-in-Nigeria products by MDAs.
The manufacturers urged the government to support manufacturers in generating energy from other sources, such as gas and solar, and increase the capital base of Bank of Industry in order to improve credit flow to the manufacturing sector.