3 years of Tinubu: Manufacturers yet to see policies translate into industrial growth — MAN

Despite the Tinubu administration's introduction of numerous economic and industrial reforms over the past three years, Nigerian manufacturers, represented by the Manufacturers Association of Nigeria (MAN), report that these policies have yet to translate into tangible industrial growth. Initiatives such as the N200 billion Presidential Intervention Fund, the Nigeria Industrial Policy (NIP) 2025, the 'Nigeria First' local content policy, and the 2025 Tax Reform Act were designed to stimulate the manufacturing sector. However, manufacturers continue to grapple with high operating costs, foreign exchange volatility, unstable power supply, and expensive borrowing, leading to job losses and reduced capacity utilization. The core challenge lies in the implementation gap, where well-intentioned policy frameworks fail to alleviate the practical burdens faced by industries, hindering their competitiveness and growth.

The Nigerian manufacturing sector finds itself at a critical juncture, three years into the administration of President Bola Ahmed Tinubu. Despite the rollout of an ambitious package of economic and industrial reforms, the Manufacturers Association of Nigeria (MAN) has voiced concerns that these policies have not yet translated into the anticipated industrial growth. This sentiment underscores a persistent challenge in Nigeria: the disconnect between policy formulation and its effective implementation and impact on the real sector.

The administration's initiatives, encompassing intervention funds, industrial roadmaps, fiscal reforms, local content policies, and foreign exchange restructuring, were designed to reposition the manufacturing sector, attract investment, and deepen local value addition. However, manufacturers report that the burden of these reforms, particularly the removal of fuel subsidies and exchange rate liberalization, has disproportionately fallen on them, leading to increased production costs and operational challenges. This article will examine the key legal and policy frameworks introduced by the Tinubu administration, analyze the reasons for the perceived lack of industrial growth, and discuss the implications for legal practitioners advising clients in the Nigerian manufacturing sector.

Nigeria's industrial policy landscape has historically been characterized by a mix of incentives and regulatory frameworks aimed at stimulating domestic production and attracting investment. Key legislation such as the Industrial Development (Income Tax Relief) Act, Cap. I7 LFN 2004, provides for pioneer status incentives, offering income tax holidays to qualifying industries to encourage investment in strategic sectors. Similarly, the Nigerian Investment Promotion Commission Act, Cap. N117 LFN 2004, established the Nigerian Investment Promotion Commission (NIPC) to encourage, promote, and coordinate investments, offering guarantees against expropriation and facilitating dispute settlement.

Under the Tinubu administration, significant policy shifts have occurred. The Nigeria Industrial Policy (NIP) 2025 was unveiled as a comprehensive 10-year framework to transform the industrial landscape, targeting a substantial increase in manufacturing's contribution to Gross Domestic Product (GDP) by 2030. This policy emphasizes productivity, competitiveness, local value addition, infrastructure development, and regulatory stability. Additionally, the 2025 Tax Reform Act introduced fiscal changes, including withholding tax exemptions, expanded Value Added Tax (VAT) deductibility on fixed assets, and phased reductions in Companies Income Tax, aimed at improving the business environment. The administration also introduced the 'Nigeria First' policy, mandating Ministries, Departments, and Agencies (MDAs) to prioritize locally manufactured goods in public procurement to stimulate domestic production.

Despite the robust policy architecture, the Manufacturers Association of Nigeria (MAN) highlights a significant gap between policy intent and practical outcomes. A primary concern is the impact of foreign exchange liberalization, which, while intended to improve transparency, has led to a sharp depreciation of the Naira. This depreciation has drastically increased the cost of imported machinery, raw materials, and industrial inputs, squeezing profit margins and forcing price increases. Manufacturers report inadequate access to foreign exchange through official channels, despite the Electronic Foreign Exchange Matching System.

Furthermore, the removal of fuel subsidies in May 2023 caused a surge in logistics and distribution expenses, while increased electricity tariffs for Band A consumers, coupled with persistent instability in grid supply, have forced manufacturers to rely on more expensive alternative energy sources. Expenditure on alternative energy sources reportedly rose from N781.68 billion in 2023 to N1.34 trillion in 2025, significantly impacting industrial competitiveness. These escalating operating costs have contributed to a decline in manufacturing capacity utilization from 61.3% in the first half of 2025 to 57.7% in the second half, with over 18,900 jobs affected during this period.

The N200 billion Presidential Intervention Fund, structured into a N75 billion Manufacturing Sector Fund, N75 billion MSME Loan Scheme, and N50 billion Nano Business Support Scheme, was designed to ease access to affordable financing. However, tight monetary policies and rising interest rates, with prime lending rates averaging 24.4% and maximum lending rates reaching 33.8% in some commercial banks by March 2026, have constrained industrial expansion and made long-term industrial investment difficult. Credit to the manufacturing sector declined from N10.88 trillion in February 2024 to N6.6 trillion by December 2025.

While the 2025 Tax Reform Act and the 'Nigeria First' policy are welcomed for their potential to improve the business environment and stimulate local content, their full benefits are yet to be realized due to the overarching macroeconomic instability. The transition from the Pioneer Status Incentive (PSI) under the Industrial Development (Income Tax Relief) Act to the new Economic Development Incentive (EDI) regime under the Nigeria Tax Act 2025, effective January 1, 2026, aims to shift towards a performance-based tax credit system. While this could offer a more targeted approach, its effectiveness will depend on seamless implementation and the ability of qualifying companies to meet new criteria and track tax credits. Concerns have also been raised by the Organised Private Sector (OPS) regarding proposed amendments to the Customs, Excise and Tariff Amendment (CETA) Bill, particularly a percentage levy on non-alcoholic beverages, which could further increase production costs and undermine fiscal reforms.

The Tinubu administration has demonstrated a clear intent to revitalize Nigeria's manufacturing sector through a series of comprehensive policy and legal reforms. However, the Manufacturers Association of Nigeria's assessment underscores a critical implementation deficit, where the intended benefits of these policies are yet to materialize on the factory floor. Legal practitioners advising manufacturing clients must therefore navigate a complex landscape characterized by ambitious policy frameworks on one hand, and significant operational challenges, including foreign exchange scarcity, high energy costs, and prohibitive borrowing rates, on the other.

Moving forward, the focus for both government and legal advisors must shift towards ensuring that policy pronouncements are matched by practical, coordinated, and responsive implementation strategies. This includes advocating for consistent enforcement of local content policies, improving access to affordable foreign exchange, stabilizing energy supply, and fostering a more predictable fiscal and monetary environment. Practitioners should closely monitor the rollout of the Economic Development Incentive (EDI) scheme and any further amendments to tax and customs legislation, advising clients on compliance and leveraging available incentives while preparing for continued macroeconomic volatility. The ultimate success of these reforms hinges on their ability to translate into tangible reductions in production costs and enhanced competitiveness for Nigerian manufacturers.