Nigeria’s manufacturing sector contracted by 4.3% year-on-year in May, marking its steepest decline in more than a year.
The data underscores the enduring pressure on industrial output from elevated input costs, which have been exacerbated by global energy price volatility linked to geopolitical tensions in the Middle East.
The slump highlights the fragility of the domestic industrial base, which continues to grapple with policy inconsistencies and overlapping regulatory burdens.
Industry leaders have previously warned that multiple taxation layers and administrative hurdles are significantly inflating production expenses, eroding competitiveness and stifling expansion plans.
For investors, the weak manufacturing print adds complexity to the macroeconomic outlook.
With GDP growth already under pressure, the central bank faces a difficult balancing act: maintaining tight monetary policy to curb inflation while avoiding further damage to an already struggling real economy.
The data suggests that any near-term rate cuts may be delayed until there is clearer evidence of stabilizing growth.
The contraction also reflects broader regional challenges, as emerging markets navigate the aftershocks of supply chain disruptions and energy shocks.