Nigeria in 2025 rolled out a raft of economic reforms covering tax restructuring, foreign exchange stabilisation, rebasing of Gross Domestic Product (GDP) and renewed infrastructure investment in Special Economic Zones (SEZs).
The reforms share a common policy thrust aimed at strengthening the manufacturing sector as a driver of economic growth and job creation.
While the measures signalled renewed policy intent to reposition industry, stakeholders say outcomes have been mixed, with manufacturers contending with implementation gaps, high input costs and lingering macroeconomic pressures.
Central to the reform agenda are landmark tax changes, including the introduction of a four per cent development levy and a 15 per cent Effective Tax Rate (ETR) for large manufacturers.
The measures have elicited divergent reactions across the private sector.
Mr Taiwo Oyedele, Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, maintained that the reforms are broadly beneficial, including for low-income earners.
He said the objectives of the reforms would lead to a more efficient, equitable and transparent tax system capable of generating sustainable government revenue and promoting economic growth.
Dr Muda Yusuf, Founder, Centre for the Promotion of Private Enterprise (CPPE), acknowledged that the reforms contained positive elements but cautioned that their fiscal impact on manufacturing could be weakened by persistently high interest rates and exchange rate volatility.
He noted that reliefs for producers and priority sectors, higher exemption thresholds for low-income earners and small businesses, and zero-rated Value Added Tax (VAT) on essentials such as food, pharmaceuticals and educational materials were notable gains.
Nonetheless, Yusuf said concerns persisted over rising compliance costs, the increase in capital gains tax from 10 per cent to 30 per cent, and potential welfare implications of changes to personal income tax.
He stressed the need to assess fiscal outcomes in both nominal and real terms to sustain policy credibility.
“Nigeria’s fiscal and tax reforms have delivered progress in expanding revenue and improving fiscal sustainability.
“The next phase must focus on revenue diversification, spending efficiency and aligning fiscal outcomes with real economic performance,” Yusuf said.
Similarly, Dr Chinyere Almona, Director-General, Lagos Chamber of Commerce and Industry (LCCI), said unifying Nigeria’s fragmented tax laws, alongside digital and institutional upgrades, would create a more competitive business environment.
She observed that inflationary effects could be twofold: a short-term uptick of about 40 to 60 basis points due to repricing and compliance adjustments, followed by medium-term easing as inefficiencies are reduced and reliance on monetary financing declines.
Almona noted that government projections anticipate headline inflation moderating to 15 per cent by end-2026 from 27.6 per cent in May 2025.
“With essential goods exempt from VAT, we expect some easing of living costs.
“Full implementation could raise non-oil tax revenues by N3.2 trillion over two years, pushing the tax-to-GDP ratio towards 12 per cent by 2027,” she said, stressing the need for sustained stakeholder engagement.
Beyond taxation, the Federal Government in 2025 placed renewed emphasis on SEZs as anchors of industrial recovery.
Throughout the year, the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, alongside the Minister of State for Industry, Sen. John Enoh, visited SEZ clusters across the country.
Oduwole described SEZs as proven engines of growth capable of attracting foreign direct investment (FDI), boosting industrialisation, creating jobs and expanding value-added exports.
She said Nigeria’s Free Trade Zones had attracted over 300 billion dollars in investment and contributed more than N650 billion to government revenue.
According to her, the ministry’s 2025 outlook document outlines a coordinated strategy to boost exports, expand access to finance and align SEZ incentives with national economic priorities through collaboration with agencies such as the Federal Inland Revenue Service (FIRS).
Enoh reaffirmed government’s commitment to reviving the textile industry and promoting Made-in-Nigeria goods through SEZs, noting that manufacturing-led growth and job creation remain central to President Bola Tinubu’s agenda.
He recalled that the textile industry once rivalled government as a major employer and assured industry players of renewed policy support.
For manufacturers, however, structural bottlenecks remain a major concern.
Mr Segun Ajayi-Kadir, Director-General, Manufacturers Association of Nigeria (MAN), said the sector’s job-creation potential remained largely untapped.
He identified persistent challenges such as inadequate and costly infrastructure, unreliable power supply, logistics and port inefficiencies, and supply chain disruptions.
Ajayi-Kadir outlined key priorities for 2026, including access to long-term and affordable finance, sustained macroeconomic and foreign exchange stability, reforms in the power sector to reduce reliance on captive generation, and smarter trade policies to curb unfair imports.
He also called for strict enforcement of “Nigeria First” procurement policies to reposition local manufacturing for global competitiveness.
(NANFeatures)
