By Arthur Eriye

Nigeria’s manufacturers have reiterated their demand for enhanced access to foreign exchange, cautioning that escalating input costs, high energy expenses, elevated borrowing rates, and ongoing supply-chain issues are jeopardizing the nation’s industrial recovery, despite signs of improving macroeconomic stability.

This renewed request arises as stakeholders within the organized private sector implore the Federal Government and the Central Bank of Nigeria (CBN) to implement deeper reforms aimed at ensuring sufficient foreign exchange liquidity for productive sectors, particularly manufacturing, which remains heavily reliant on imported machinery, raw materials, and industrial components. The Lagos Chamber of Commerce and Industry (LCCI) has emphasized that consistent policy, transparent foreign exchange management, and robust support for productive enterprises are essential for maintaining industrial growth.

This appeal underscores the increasing apprehension within the manufacturing sector that, although exchange-rate fluctuations have lessened, numerous firms still encounter challenges in obtaining foreign exchange in adequate amounts and at competitive rates, thereby raising production costs and diminishing their competitiveness.

Recent findings from the LCCI’s Business Environment Journal for the first quarter of 2026 depict a challenging landscape for manufacturers. The Chamber’s Cost of Doing Business Monitor escalated from 67.5 in the fourth quarter of 2025 to 70.5 in the first quarter of 2026, signifying that businesses continue to experience intense cost pressures. The industrial sector—which encompasses manufacturing, mining, and oil and gas—saw the most significant rise, with its cost index soaring from 64.5 to 80.5, reflecting a 25 percent quarterly increase, the highest among all sectors.

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The report indicates that 73.58 percent of businesses faced increased electricity costs during the quarter, while 56.09 percent noted a rise in expenditures on alternative energy sources such as diesel and gas due to unreliable grid power. Furthermore, 57.52 percent of respondents stated that they did not receive the electricity supply hours for which they had paid, thereby escalating operating costs.

Additionally, raw material costs continue to be under pressure. Over half of the businesses surveyed reported higher input prices, which reflect the cumulative impact of foreign exchange limitations, logistics expenses, and inflation. These elements have constrained manufacturers’ profit margins, postponed expansion initiatives, and, in numerous instances, compelled companies to transfer increased costs to consumers.

Industry analysts observe that while recent reforms have bolstered confidence in Nigeria’s foreign exchange market, manufacturers need not only stability in exchange rates but also dependable access to foreign currency to maintain production. Delays in obtaining dollars for imports can disrupt production timelines, diminish capacity utilization, and weaken export competitiveness.

Another significant challenge is the elevated cost of credit. High interest rates persist in deterring investments in new machinery and factory expansion, thereby constraining manufacturers’ capacity to boost production and generate employment. Consequently, LCCI has called on authorities to enhance monetary reforms with initiatives that improve credit flow, bolster infrastructure, lower logistics expenses, and expedite regulatory changes.

Economists assert that the manufacturing sector is pivotal to Nigeria’s diversification strategy due to its robust connections with agriculture, mining, transportation, and services. A more competitive industrial foundation would not only diminish reliance on imports but also encourage exports, create jobs, and enhance economic resilience.

For manufacturers, however, the immediate focus remains unequivocal: ensuring stable access to foreign exchange. Industry leaders caution that without it, escalating production costs could hinder investment, diminish output, and obstruct Nigeria’s goal of establishing a globally competitive manufacturing sector.

As policymakers implement broader economic reforms, industry stakeholders emphasize that facilitating timely and affordable foreign exchange for productive sectors will be a critical measure of Nigeria’s industrial recovery. Recent business surveys indicate that unless these structural challenges are resolved, manufacturers will continue to encounter substantial cost pressures, even as macroeconomic indicators show gradual improvement.