The KPMG has declared that the ongoing government reforms, stability in foreign exchange (FX) market, current banking recapitalisation and growing investors’ confidence on government’s policies are expected to drive the anticipated growth momentum in the Nigerian manufacturing sector.
This is as Andersen Nigeria has said that the unfolding tax regime would provide significant advantages for manufacturing companies as zero-rating of essential manufacturing inputs would reduce production costs while supporting import substitution objectives.
The KPMG made this declaration last week in a presentation by Senior Partner KPMG Nigeria and CEO KPMG West Africa, Mr. Tola Adeyemi, titled, “Nigeria’s Economic Scorecard: Agriculture, Manufacturing, and Services” at the Lagos Chamber of Commerce and Industry (LCCI) 2025 Mid-Year Economic Review and Outlook Conference.
Adeyemi was represented at the event by a Partner, KPMG Professional Services Nigeria, Mr. Mohammed Adama.
Adeyemi said: “The manufacturing sector is expected to experience moderate growth on the back of growing investors’ confidence arising from ongoing reforms, and also access to regional markets due to the takeoff of the African Continental Free Trade Area (AfCFTA) and government policy support.”
According to him, factors that would drive the growth in the manufacturing sector include the recapitalisation of the commercial banks and development financial institutions (DFIs), energy reform and infrastructure development, and enhancement of ease of doing business in the country.
He said that there would be improved access to long term capital from full implementation of the Central Bank of Nigeria’s directive regarding the banking sector’s recapitalisation and ongoing reforms.
According to him, “DFIs like BOI are expected to deepen targeted interventions in priority subsectors (e.g. agro processing, light manufacturing),” adding that ongoing power sector reforms and mini-grid projects could reduce manufacturers’ reliance on diesel, which would improve their margins.
He also said that “higher infrastructure spending and the rollout of new and upgraded special economic zones (SEZs), industrial parks, and transport logistics corridors (rail, inland ports, dry ports) to ease logistics bottlenecks” would bolster Nigeria’s industrial output.
According to him, the ongoing fiscal and monetary reforms have resulted to stability in the FX market.
“The new tax and fiscal policy reforms/the new tax law brought about by the presidential Committee on Fiscal Policy and Tax Reforms has streamlined taxation and is expected to ease compliance burden on businesses.”
He, therefore, tasked the government to unlock access to long-term finance needed for critical long-term projects by strengthening and recapitalising DFIs like Bank of Industry (BOI), Nigeria Export and Import Bank (NEXIM) and others.
Adeyemi said that government should work with Securities and Exchange Commission and the Nigeria Exchange to deepen capital markets for large-scale equity funding.
According to him, “reforms in the power sector must be continued and be accelerated to drive real industrialization while other infrastructure such as rail and road transport must remain areas of focus for the government.”
He recommended the digitalisation and automation of border clearing processes in order to reduce the average time to clear goods.
He said: “We need more efficient and cost-effective ports. There is need to streamline the number of taxes/levies to reduce compliance burden on manufacturers/businesses.”
He added that government should continue to support the MSMEs by providing single digit interest loans to them through BOI and Bank of Agriculture, etc.
“The scope and reach of support services being provided by Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) to the MSMEs should be expanded.”
Adeyemi also asked the government to address security challenges that has been plaguing the country for nearly more than a decade and half, arguing that no real development could take place in an insecure environment.
He said; “There is need to urgently address the insecurity across the country to improve investor confidence. This would also help improve farming activities and stem food inflation.”
He also said that partnership should be forged between the private sector and government agencies in the area of training to develop skills that are required by the manufacturing sector and other private sectors.
He also noted that ESG concerns are increasingly shaping the manufacturing sector with stricter regulations and a growing emphasis on sustainability.
Adeyemi said: “Manufacturers need to focus on innovation to reduce their environmental impact, develop sustainable practices, and promote circular economy models.We need consistency and discipline in execution of government policies and programmes to create some level of certainty for investors to plan.”
In his presentation during 2025 mid-year review and outlook, the Regional Managing Director/Partner, Andersen Nigeria, Mr. Olaleye Adebiyi, said that the manufacturing companies could leverage these incentives contained in the new tax laws to enhance their competitiveness while contributing to national development goals.
Adebiyi said: “The reforms particularly benefit companies engaged in value-added production, creating opportunities for vertical integration and supply chain optimisation. The Nigeria Tax Act 2025 signals a new era for the Nigerian tax regime, offering a mix of incentives and obligations that can reshape industrial growth if property leveraged. At the same time, the Acts demands greater compliance discipline, including mandatory e-invoicing and stricter reporting requirements.
“To fully benefit businesses must act swiftly by reviewing their tax strategies, updating internal systems, and ensuring their teams understand the new rules. Businesses that stay updated early will be best positioned to ensure compliance.”
