Nigeria’s Manufacturers Keep Expanding as Power and Financing Costs Weigh on Performance

Nigeria’s manufacturing sector remained in expansion territory in October, but business performance weakened. The NESG Business Confidence Monitor index fell to 107.3 points from 108.4 in September. Textile, Apparel and Footwear dropped to 99.7 points, while Cement remained below the 100-point threshold at 94.5. Food, Beverage and Tobacco was the only one of the three major subsectors to improve and remain in expansion territory. Manufacturers cited frequent power cuts, limited raw-material supplies, high costs and restricted access to credit among their challenges. Access to credit and cash-flow readings declined from September, although both remained above the survey’s expansion threshold. Separately, the system operator cited inadequate gas supply and reduced water inflows as constraints on electricity generation in early November. The NESG figures measure reported business conditions, not production volumes. The report does not quantify how much power interruptions add to manufacturers’ costs. Still, the findings point to pressure on margins and working capital as businesses try to sustain production and invest in capacity.

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