Nigerian Manufacturers See Little Productivity Boost from Infrastructure Spending, Cite High Loan Costs

Chief executive officers of manufacturing companies in Nigeria have indicated that government infrastructure spending has not yet translated into significant productivity gains for their sector. The Manufacturers’ CEOs Confidence Index (MCCI) report for the second quarter of 2026 reveals that while the overall index saw a slight increase, manufacturers remain concerned about several key economic factors.

The CEOs voiced strong objections to the cost and availability of credit from commercial banks. They specifically lamented the high interest rates on loans, which they directly attribute to the Central Bank of Nigeria's elevated Monetary Policy Rate (MPR) of 26.5 percent. This high cost of borrowing is seen as a major impediment to business growth and investment.

Furthermore, manufacturers reported that they have not experienced a notable impact from government infrastructure projects on their output. While acknowledging that capital expenditure can take time to yield substantial benefits, they also expressed dissatisfaction with improvements in foreign exchange sourcing. They argue that the effects of Naira liberalization should have become more apparent after more than three years, impacting their ability to produce at full potential.

Concerns about the regulatory environment persist, with CEOs highlighting overregulation of business activities. Uncertainty surrounding the implementation of the Nigeria Tax Act 2025 has also fueled doubts about the potential benefits of these tax reforms. Compounding these issues, the persistent gridlock at ports continues to constrain the timely importation of essential materials for production plants, although manufacturers noted some improvements in local sourcing.