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Predicts Nigeria’s Economy To Grow 4% By 2026
By Musa Ibrahim
The Manufacturers Association of Nigeria (MAN) has projected a decline in Nigeria’s headline inflation rate to 14% by 2026, citing easing food prices, stable energy costs, and the sustained appreciation of the naira as key factors.
Speaking at a press conference in Lagos recently during the 2025 MAN Think Tank Session, the Director of Research and Economic Policy Division, Dr. Oluwasegun Osidipe, said that the disinflationary trend would be supported by consistent policy actions from the Central Bank of Nigeria (CBN).
“Headline inflation will decelerate further to 14 percent, supported by easing food prices, stable energy prices, and appreciation of the naira,” he said.
MAN expressed optimism that the CBN would maintain its current policy trajectory to foster macroeconomic stability and encourage private sector growth.
Interest Rate to Drop to 23%
The association also anticipated that the Monetary Policy Rate (MPR) would fall to 23% in 2026, as the CBN continues efforts to expand credit and stimulate output growth.
According to Dr. Osidipe, “Further reduction in lending rates and completion of the bank recapitalisation exercise will enhance credit availability to manufacturers, strengthening investment and capacity utilisation.”
Stronger Naira Outlook
MAN anticipates further strengthening of the naira to between N1,300 and N1,400 per dollar, driven by recovering global oil prices, stronger external reserves, increased foreign investments, and remittance inflows.
Growth Drivers: New Tax Laws and ‘Nigeria First’ Policy
The association said that economic gains would be anchored on effective execution of new tax incentives, implementation of the National Single Window Project, and alignment of the Nigeria Industrial Policy with the government’s “Nigeria First” framework.
Dr. Osidipe projected that Nigeria’s GDP growth could reach 4% in 2026, supported by higher oil output, fiscal stability, improved manufacturing performance, and heightened consumer spending expected during the election season in the last quarter of 2026.
Standard Bank and other analysts have also projected a gradual moderation in inflation through 2026, in line with improved monetary coordination and stable foreign exchange conditions.
According to the report, the growth outlook is anchored on the government’s ongoing economic reforms — particularly incentives targeted at the manufacturing sector through new tax laws, regulatory reforms, and the operationalisation of the National Council on Industry.
“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 stated.
The association also identified Nigeria’s industrial and green industrial policies as crucial drivers that will enhance productivity, competitiveness, and sectoral expansion in the coming year.
Manufacturing Sector Confidence Rises
MAN noted that its Manufacturing CEOs Confidence Index has been on a steady rise since 2025, signalling that the economy is gradually recovering.
The report also linked moderate economic growth to increased defence spending and the heightened demand for military hardware resulting from regional conflicts, which have strengthened economic integration across West Africa.
Government Incentives Boosting Output
Speaking at a press briefing to unveil the report, MAN’s Director-General, Mr. Segun Ajayi-Kadir, expressed optimism about the manufacturing sector’s growth trajectory, citing ongoing government support and funding initiatives.
He highlighted the Federal Government’s provision of N75 billion in single-digit interest loans through the Bank of Industry to support 75,000 SMEs, alongside tax reliefs and the “Nigeria First” policy, which prioritises local manufacturers in public procurement.
“Between Q2 2024 and the first half of 2025, we witnessed a significant jump in capacity utilisation simply because manufacturers had access to loans at single-digit interest rates,” Mr. Ajayi-Kadir said.
He explained that such incentives allow manufacturers to reinvest, boost production, create jobs, and increase overall output.
“If my installed capacity is one million bottles and I’m only producing 600, with better access to loans and fewer taxes, I can scale up production, employ more workers, and sell more,” he added.
Mr. Ajayi-Kadir urged the government to sustain policy consistency and increase patronage of locally manufactured goods, stressing that doing so would “scale up production and accelerate the growth momentum.”
