Nigerian Manufacturers Expect Hiring to Hit Six-Year High as Confidence Rises
Nigeria’s manufacturers expect employment conditions to reach their strongest level since 2019 in the third quarter of 2026, signalling renewed optimism in the sector despite persistent challenges including high borrowing costs, multiple taxation and limited access to foreign exchange.
The latest Manufacturers’ CEO Confidence Index (MCCI) released by the Manufacturers Association of Nigeria (MAN) on Thursday showed that over 400 manufacturers projected an employment conditions index of 55.2 points for the third quarter, up from the current 42.8 points recorded in the second quarter. It is the highest projected reading since the quarterly survey began in 2019.
Overall business confidence in Africa’s most populous nation also strengthened during the second quarter, with the aggregate MCCI rising to 52.1 points, its highest level since the second quarter of 2021 and above the 48.7 points recorded in the first quarter. A reading above 50 indicates improving business conditions.
According to MAN, the improvement reflects growing confidence among manufacturers in the country’s business outlook, supported by recent policy reforms.
“Within Q2, manufacturers reported a return of confidence in doing business in Nigeria. This confidence was more related to the expected commercial environment than to the economy’s prevailing business and employment conditions,” the association said.
The report noted that recent reforms, including the Nigeria Tax Act 2025, executive orders, the proposed Nigeria Industrial Policy and the Nigeria First Policy, have improved manufacturers’ expectations for the months ahead.
The improved hiring outlook comes after two years of painful economic adjustments following President Bola Tinubu’s reforms, including the removal of the petrol subsidy and the liberalisation of the foreign exchange market. While those policies initially raised production costs and forced some manufacturers to scale back operations and jobs, businesses now appear cautiously optimistic that macroeconomic conditions are beginning to stabilise.
However, business conditions remain challenging.
Manufacturers identified limited access to finance, frequent electricity outages, high production costs, inadequate foreign exchange availability, weak consumer demand and multiple taxation as the biggest constraints on operations during the quarter.
Segun Ajayi-Kadir, director-general of MAN, said manufacturers were yet to experience meaningful productivity gains from government infrastructure spending, noting that such investments typically take time to filter through to the real economy.
“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,” he said.
Ajayi-Kadir added that manufacturers were also dissatisfied with foreign exchange availability despite reforms in the currency market.
“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,” he said.
The association also said the Tax Act has yet to deliver its intended objective of reducing multiple taxes and levies.
“Manufacturers complained that they were still met with multiple tax collectors and regulators in Q2 2026,” Ajayi-Kadir said. “It follows that the implementation of the Act is yet to achieve its objective of relieving manufacturers of the burden of taxes and levies.”
While manufacturers reported modest improvements in sales volumes during the quarter, capacity utilisation, production, investment and employment remained broadly unchanged. Rising production, distribution and logistics costs also continued to squeeze margins.
MAN said Nigeria’s operating environment remained largely unsupportive of manufacturing productivity. Local sourcing of raw materials was the only area manufacturers assessed positively, although worsening insecurity in parts of the country continued to threaten those gains.
Manufacturing executives also expressed concern over the high cost of borrowing, blaming elevated lending rates on the Central Bank of Nigeria’s benchmark Monetary Policy Rate (MPR) of 26.5 percent, which they said had pushed commercial lending rates beyond the reach of many manufacturers.
They also raised concerns over persistent regulatory bottlenecks, including multiple tax collectors, port congestion and uncertainty surrounding the implementation of the Nigeria Tax Act 2025. In addition, manufacturers said the inadequate supply of foreign exchange continued to constrain production despite reforms that have helped stabilise the naira.
The association noted that patronage of locally manufactured goods by Ministries, Departments and Agencies (MDAs) remained weak despite the government’s Nigeria First Policy, limiting the ability of manufacturers to reduce inventories and expand production.
MAN urged the central bank to reduce the MPR to below 20 percent to unlock manufacturing growth. It also called for priority foreign exchange allocation for manufacturers and stricter enforcement of the Nigeria First Policy, which mandates MDAs to source at least 80 percent of their procurement from locally made products.

