Business group warns poor budget execution, high production costs, and policy gaps are stifling Nigeria’s industrial growth…..
The Lagos Chamber of Commerce and Industry (LCCI) has raised fresh concerns over the state of Nigeria’s manufacturing sector, calling for urgent government reforms to tackle persistent structural and fiscal challenges slowing economic progress.
Speaking at the Chamber’s quarterly media briefing in Lagos, LCCI President, Leye Kupoluyi, warned that weak fiscal management, delays in budget implementation, and systemic inefficiencies continue to undermine productivity and investment in the sector.
He stressed that Nigeria must adopt stronger fiscal discipline and overhaul its capital budget execution framework to ensure timely funding and effective delivery of projects.
According to Kupoluyi, recurring delays in fund releases, coupled with bureaucratic bottlenecks and limited execution capacity, have created a cycle of stalled projects and reduced private sector confidence.
Despite these challenges, the manufacturing sector has continued to demonstrate resilience and remains a significant contributor to government revenue.
Kupoluyi revealed that the sector generated N1.17 trillion in Value Added Tax (VAT) in 2025, marking a 45.61 per cent increase from the previous year. Company Income Tax (CIT) also rose significantly to N881.29 billion, reflecting a 32.83 per cent growth.
However, he cautioned that these gains are being threatened by rising production costs and an increasingly difficult operating environment.
Manufacturers, he said, are grappling with unreliable electricity supply, high energy costs driven by dependence on generators, inefficient logistics systems, and inconsistent policy direction.
“Frequent power outages and unstable distribution networks are severely impacting productivity,” he noted, urging the government to accelerate investments in renewable energy and strengthen grid management.
The Chamber also pointed to policy-related challenges, particularly high import duties on key raw materials such as paper and printing inputs, which it said are driving up production costs across several industries.
In addition, persistent port congestion and regulatory hurdles continue to delay the movement of goods, further compounding operational challenges for businesses.
To address these issues, the LCCI called for a coordinated policy response, including moderate tariff structures, streamlined port operations, and targeted support for local manufacturers.
Kupoluyi also drew attention to broader fiscal concerns, highlighting the rollover of N7.71 trillion in unimplemented capital projects from the 2025 budget as evidence of systemic weaknesses.
He warned that inadequate funding of capital projects has far-reaching consequences, particularly for contractors and businesses that depend on government spending for survival.
“When contractors are not paid, their operations suffer, jobs are put at risk, and economic activity slows,” he said, emphasizing the need for a more reliable and transparent framework for capital budget releases.
The Chamber maintains that without urgent reforms, Nigeria risks missing out on the full potential of its manufacturing sector, which remains critical to job creation, industrialisation, and long-term economic stability.
As pressure mounts, the message from the private sector is clear: fixing fiscal inefficiencies and easing operational constraints will be key to unlocking sustainable growth in Nigeria’s industrial landscape.
