Manufacturers Want Credit Guarantee, Priority FX Window to Save Jobs

By Adedapo Adesanya

The Manufacturers Association of Nigeria (MAN) has called on the federal government to introduce a dedicated credit guarantee scheme and establish a prioritised foreign exchange clearance window for manufacturers to prevent further job losses in labour-intensive sectors.

The association made the call in its report on Nigeria’s second-quarter 2026 Gross Domestic Product, saying the 4.43 per cent headline growth recorded in the period masked persistent structural weaknesses in the real sector.

MAN noted that although GDP growth accelerated from 3.89 per cent in the first quarter, key labour-intensive manufacturing segments continued to struggle, with some recording contractions.

According to the report, the Textile, Apparel and Footwear segment, which accounts for 22.95 per cent of manufacturing real GDP, contracted by 1.23 per cent, while Motor Vehicles and Assembly declined by 1.02 per cent.

The largest manufacturing group, Food, Beverage and Tobacco, recorded modest growth of 2.79 per cent, which MAN attributed partly to weak consumer purchasing power and persistent food inflation.

The Director-General of MAN, Mr Segun Ajayi-Kadir, said the growth recorded during the quarter was concentrated largely in capital-intensive segments such as oil refining and cement, while labour-intensive industries remained under severe pressure.

“Growth was concentrated in capital-intensive segments like Oil Refining and Cement, but our labour-intensive sectors are under severe pressure,” he said.

Mr Ajayi-Kadir warned that the contraction in textiles and vehicle assembly could directly affect wage employment, particularly among lower- and middle-income workers.

“The contraction in textiles and vehicle assembly directly threatens wage employment and risks triggering job losses across lower- and middle-income demographics,” he said.

To reverse the trend, the MAN chief called for a transparent, prioritised FX clearance window for the importation of raw materials and capital machinery, particularly transactions backed by Letters of Credit.

He also advocated a dedicated credit guarantee scheme through the Ministry of Finance Incorporated and the Development Bank of Nigeria to reduce the risks faced by commercial banks in lending to manufacturers and ultimately bring down borrowing costs.

“Outrageous interest rates, high exchange rates and exorbitant electricity tariffs are suffocating manufacturers, especially SMEs,” Mr Ajayi-Kadir said.

He warned that without targeted monetary and foreign exchange interventions, industrial expansion would continue to lag behind overall economic growth.

Mr Ajayi-Kadir also urged the National Assembly to pass the Nigeria Industrial Policy 2025 into law and integrate the Bureau of Public Procurement portal with a local content registry.

He proposed that budget releases to Ministries, Departments and Agencies that fail to meet a 60 per cent local procurement target should be automatically blocked.

The MAN director-general further called for the enactment of a Local Patronage Compliance Act that would give Nigerian manufacturers the right of first refusal in government procurement.

According to him, the dominance of services and trade in the economy does not provide sufficient productive capacity or employment opportunities to absorb Nigeria’s expanding labour force.

“Services and trade at 56.62 per cent and 17.93 per cent of GDP respectively do not inherently generate the sustainable productivity or high-density employment required to absorb Nigeria’s growing labour force,” he said.

He added that Nigeria needed to shift its economic focus towards manufacturing to strengthen foreign exchange reserves, moderate inflation and create sustainable employment.

“We must pivot to manufacturing to strengthen FX reserves, reduce inflation and create sustainable jobs,” Mr Ajayi-Kadir said.