KPMG: Reforms, Stable FX, Banking Recapitalisation to Drive Nigeria’s Manufacturing Growth
KPMG Nigeria has projected that Nigeria’s manufacturing sector will experience moderate but sustained growth, driven by key government reforms, stable foreign exchange (FX) conditions, and ongoing banking recapitalisation efforts.
Speaking at the LCCI 2025 Mid-Year Economic Review and Outlook Conference, Senior Partner and CEO of KPMG West Africa, Tola Adeyemi (represented by Mr. Mohammed Adama), outlined several drivers of growth in the sector:
Key Growth Drivers Identified by KPMG:
• FX Market Stability: Reforms have brought increased confidence and stability.
• Bank Recapitalisation: Expected to improve long-term capital access through commercial banks and Development Finance Institutions (DFIs).
• Power & Infrastructure Reforms: Reduced reliance on diesel due to mini-grid projects; improved logistics from better rail, ports, and industrial parks.
• AfCFTA Implementation: Expanded access to regional markets.
• Tax Policy Overhaul: Streamlined tax regime to ease compliance and lower production costs.
Additional Highlights from the Conference:
• DFIs like BOI are expected to deepen interventions in priority areas such as agro-processing and light manufacturing.
• Special Economic Zones (SEZs) and industrial corridors will be rolled out or upgraded to ease logistics and manufacturing constraints.
• Capital Markets Development: Government urged to work with SEC and NGX to deepen equity funding access.
• Border Process Automation: Suggested to reduce clearing times and improve trade efficiency.
Recommendations to Government:
• Provide single-digit interest loans to MSMEs via BOI and Bank of Agriculture.
• Expand the scope of SMEDAN’s support to MSMEs.
• Urgently address security challenges to attract investment and stabilize agriculture.
• Encourage private-public training partnerships to develop skills for industrial growth.
• Support sustainable manufacturing through innovation, environmental consciousness, and circular economy models.
Andersen Nigeria’s Perspective:
Olaleye Adebiyi, Regional MD at Andersen Nigeria, echoed similar optimism, stating that:
• The Nigeria Tax Act 2025 offers manufacturers incentives such as zero-rated essential inputs, e-invoicing, and supply chain benefits.
• However, it also demands stricter compliance and timely adaptation by businesses to take full advantage.
Final Takeaway:
Both KPMG and Andersen Nigeria believe Nigeria is at a critical inflection point where consistent execution of reforms, strong policy direction, and enhanced business support could usher in a new era of growth and competitiveness in the manufacturing sector.
KPMG Nigeria has projected that Nigeria’s manufacturing sector will experience moderate but sustained growth, driven by key government reforms, stable foreign exchange (FX) conditions, and ongoing banking recapitalisation efforts.
Speaking at the LCCI 2025 Mid-Year Economic Review and Outlook Conference, Senior Partner and CEO of KPMG West Africa, Tola Adeyemi (represented by Mr. Mohammed Adama), outlined several drivers of growth in the sector:
Key Growth Drivers Identified by KPMG:
• FX Market Stability: Reforms have brought increased confidence and stability.
• Bank Recapitalisation: Expected to improve long-term capital access through commercial banks and Development Finance Institutions (DFIs).
• Power & Infrastructure Reforms: Reduced reliance on diesel due to mini-grid projects; improved logistics from better rail, ports, and industrial parks.
• AfCFTA Implementation: Expanded access to regional markets.
• Tax Policy Overhaul: Streamlined tax regime to ease compliance and lower production costs.
Additional Highlights from the Conference:
• DFIs like BOI are expected to deepen interventions in priority areas such as agro-processing and light manufacturing.
• Special Economic Zones (SEZs) and industrial corridors will be rolled out or upgraded to ease logistics and manufacturing constraints.
• Capital Markets Development: Government urged to work with SEC and NGX to deepen equity funding access.
• Border Process Automation: Suggested to reduce clearing times and improve trade efficiency.
Recommendations to Government:
• Provide single-digit interest loans to MSMEs via BOI and Bank of Agriculture.
• Expand the scope of SMEDAN’s support to MSMEs.
• Urgently address security challenges to attract investment and stabilize agriculture.
• Encourage private-public training partnerships to develop skills for industrial growth.
• Support sustainable manufacturing through innovation, environmental consciousness, and circular economy models.
Andersen Nigeria’s Perspective:
Olaleye Adebiyi, Regional MD at Andersen Nigeria, echoed similar optimism, stating that:
• The Nigeria Tax Act 2025 offers manufacturers incentives such as zero-rated essential inputs, e-invoicing, and supply chain benefits.
• However, it also demands stricter compliance and timely adaptation by businesses to take full advantage.
Final Takeaway:
Both KPMG and Andersen Nigeria believe Nigeria is at a critical inflection point where consistent execution of reforms, strong policy direction, and enhanced business support could usher in a new era of growth and competitiveness in the manufacturing sector.