By Onu Okorie

Manufacturers Association of Nigeria (MAN) has said the marginal moderation in headline inflation has yet to translate into lower production costs, as manufacturers continue to grapple with high energy, logistics, financing and input expenses.
MAN Director-General, Segun Ajayi-Kadir, disclosed this in the association’s position paper issued in Lagos in reaction to the August inflation rate of 15.39 per cent.
The National Bureau of Statistics (NBS) reported that headline inflation moderated to 15.39 per cent in August from 15.43 per cent in July, representing a decline of 0.04 percentage points.
Ajayi-Kadir described the moderation as a positive development but said the small decline indicated that the improvement remained fragile.
He said while the August figures provided a modest positive signal for the economy, sustainable economic growth required more than a gradual reduction in headline inflation.
“Manufacturers continue to operate amid high energy costs, logistics challenges, exchange rate costs, elevated raw-material prices and multiple fiscal and regulatory charges,” he said.
According to him, persistent cost pressures were having significant implications for production, pricing, investment and employment across the manufacturing sector.
He noted that manufacturers could not always pass the full increase in production costs on to consumers because of weak purchasing power.
“This situation continues to put pressure on manufacturers’ margins while increasing their working capital requirements. When input prices rise, manufacturers require more funds to purchase the same quantity of materials,” he said.
The MAN chief executive added that high energy, financing and logistics costs were making investment decisions more cautious and reducing the attractiveness of new investments in the sector.
He warned that capacity utilisation could remain constrained as some manufacturers might reduce production when the cost of operating additional shifts or purchasing additional inputs became commercially unsustainable.
Ajayi-Kadir urged the Federal Government to use the period of relative inflation moderation to introduce targeted measures aimed at reducing production costs and improving productivity.
He called for measures to lower industrial energy costs, including the provision of dedicated and reliable electricity to major industrial clusters.
He also advocated priority access to gas for industrial users and incentives for investment in efficient captive power and renewable energy systems, saying such measures would enhance productivity in the manufacturing sector.
On transportation, Ajayi-Kadir called for the rehabilitation of major transport corridors linking ports, industrial clusters, agricultural production zones and major markets.
He noted that transport contributed 1.64 per cent to inflation and urged the government to eliminate unnecessary road charges and overlapping transport-related levies.
He further called for the implementation of the new tax laws in a manner that promotes equity, transparency and fairness without imposing additional burdens on local production.
“MAN also calls for effective implementation of the Nigeria First Policy to promote locally manufactured goods, particularly in government procurement,” he said.
The association also recommended a targeted, long-term manufacturing financing window at below-market interest rates to support working capital, machinery acquisition and productivity-enhancing investments, particularly for small-scale manufacturers. MAN said sustained efforts to address production costs would be critical to improving the competitiveness and resilience of Nigeria’s manufacturing sector.
If you want, I can also turn this into a more punchy national newspaper style, with a stronger headline, shorter paragraphs and a sharper lead.