The Alliance for Economic Research and Ethics (AERE) has called for urgent reforms to strengthen Nigeria’s manufacturing sector after a sharp decline in manufacturing tax revenue during the first quarter of 2026. The group urged the Federal Government and the Central Bank of Nigeria (CBN) to introduce bold measures that will support industrial growth and improve productivity.
In a policy brief, AERE Chairman Dele Oye acknowledged the Bank of Industry (BoI) for disbursing a record N644.9 billion in loans in 2025. However, he argued that while the achievement is commendable, it is not enough to transform Nigeria’s manufacturing sector.
According to the report, Company Income Tax (CIT) revenue from manufacturers fell by 31 per cent year-on-year to N74.48 billion in the first quarter of 2026, compared with N107.90 billion in the same period of 2025 and N141.84 billion in the fourth quarter of 2025. The decline reflects rising production costs and shrinking profit margins across the industry.
Oye praised the Bank of Industry for supporting 1.68 million jobs and funding projects in 14 strategic sectors, while also commending the CBN and President Bola Tinubu for policies that place manufacturing at the heart of the Renewed Hope Agenda and the 2025 Nigeria Industrial Policy. Despite these efforts, he said manufacturers continue to struggle with unreliable electricity, lending rates above 35 per cent, unresolved 2.4 billion US dollar foreign exchange obligations, increased government borrowing and limited access to affordable long-term finance.
He warned, “The manufacturing sector, which should be the engine of this transformation, is gasping. Q1 2026 has delivered a decline in manufacturing tax revenue. When manufacturers pay less tax, it is because they are producing less, selling less and slowly suffocating.”
Oye also described the BoI’s financial support as “a drop of water in a desert of industrial thirst,” stressing that Nigeria needs to create at least four million jobs each year while many factories still operate below half of their installed capacity. He called for faster implementation of industrial policies, lower lending rates, improved tax incentives, stronger credit support and dedicated power supply for industrial clusters.
Do you think these proposed reforms can help revive Nigeria’s manufacturing sector and create more jobs?
