Nigeria’s manufacturing sector grew 3.29 percent year-on-year in the first quarter of 2026, doubling from 1.69 percent in Q1 2025, as reforms in foreign exchange began to ease long-standing constraints on factory output.
The acceleration marks the sector’s strongest quarterly performance in four years when the sector grew 5.89 percent in the first quarter of 2022, according to data from the National Bureau of Statistics.
The report also showed that the sector’s real contribution to GDP in the third quarter was 9.57 percent, lower than the 9.62 percent recorded in the same period of 2025 and higher than the 7.40 percent recorded in the fourth quarter of 2025.
Manufacturers, who have struggled with diesel costs and currency volatility, reported higher capacity utilisation and new orders as policy changes took effect.
The first quarter’s strong growth signals tentative momentum for President Tinubu’s reform agenda, though analysts caution the sector remains fragile.
Power deficits and financing costs continue to weigh on smaller firms, suggesting sustained growth will depend on follow-through on infrastructure and credit reforms.
Read also: https://businessday.ng/real-sector/article/manufacturers-want-power-tax-reforms-to-grow-factory-output-for-competitiveness/
In a policy brief document, Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, described the sector’s growth as “modest”, warning that manufacturing’s contribution to GDP remains below 10 per cent — a sign of the “continuing structural constraints” hobbling Nigeria’s industrial base.
“High energy costs, elevated interest rates, weak infrastructure, logistics bottlenecks, and policy uncertainties continue to undermine industrial productivity and competitiveness,” he said.
Nigeria’s fast-moving consumer goods manufacturing firms are reporting strong profits in the first quarter of the year.
BusinessDay’s analysis of 10 leading consumer firms’ first quarter of 2026 financial statements, including BUA Foods, Nestle, Unilever Nigeria, Nascon Allied Industries Ltd, Dangote Sugar Refinery, Cadbury Nigeria, Champion Breweries, International Breweries, Guinness Nigeria and Nigerian Breweries, combined profits rose to N307.5 billion, a 19.6 percent increase from N255.2 billion in the same quarter in 2025.
In January, the Manufacturers Association of Nigeria (MAN) forecasted that the country’s manufacturing sector would grow by 3.1 percent in 2026, underscoring renewed optimism in the domestic manufacturing outlook.
“Real manufacturing growth is projected to reach 3.1 percent while contribution to real GDP is expected to rise to 10.2 percent,” MAN said in its outlook for 2026.
“The rationale for these projections is hinged on the ongoing reforms of government, particularly the incentives being channelled to the manufacturing sector through new tax laws, regulatory adjustments, and the operationalisation of the National Council on Industry and other policy frameworks,” MAN said.
The manufacturing association projected that gains would depend largely on the execution of incentives under the new tax laws, the operationalisation of the National Single Window Project and the purposeful implementation of the Nigeria Industrial Policy in alignment with the Nigeria First policy framework.
The sector has continued to record increased manufacturers’ confidence. In the most recent data from the Manufacturers Association of Nigeria (MAN), the confidence index of chief executive officers of manufacturing firms was 50.7 in the third quarter of the year (Q3’25). up 0.4 from 50.3 in the previous quarter (Q2’25).
The sector’s performance was largely driven by five major subsectors that recorded positive growth and they are oil refining which grew 37.46 percent from 11.51 percent, cement recorded 11.53 percent from 4.49 percent growth in q1 2025 and chemical and pharmaceutical products recorded 6.15 percent growth.
Others are food, beverage and tobacco with 4.10 percent and motor vehicles & assembly with 5.44 percent growth.