The US Iran conflict impact is creating significant pressure on Nigeria’s manufacturing sector, with the Manufacturers Association of Nigeria warning of rising production costs and weakening consumer demand.
The association outlined urgent measures to cushion the effects of the ongoing geopolitical crisis on local industries.
Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, stated that the conflict has triggered a chain of economic disruptions affecting global supply systems.
He noted that Nigerian manufacturers are already experiencing higher input costs and operational challenges linked to the crisis.
According to him, the US Iran conflict impact has led to increased freight costs, longer delivery timelines, and difficulties in accessing critical raw materials.
He explained that the disruption of global shipping routes and energy supply chains has made imports more expensive and less predictable.
Global data show that the conflict has affected oil supply routes, particularly through the Strait of Hormuz, a major channel for global energy trade.
Disruptions in the region have pushed up oil prices and increased transportation costs worldwide, contributing to inflationary pressures.
Ajayi-Kadir warned that the situation presents a dual challenge for manufacturers.
“Production costs are rising sharply, while consumer purchasing power is weakening,” he said, noting that the sector is now dealing with both cost pressures and declining demand.
He added that the US Iran conflict impact could undermine the sector’s projected 3.1 percent growth for 2026 if no immediate action is taken.
The manufacturing sector remains a critical component of Nigeria’s economy, contributing to employment and industrial development.
To address these challenges, the Manufacturers Association of Nigeria proposed several measures.
These include accelerating the Presidential Compressed Natural Gas initiative to reduce reliance on diesel and lower energy costs for industrial operations.
The association also called for the establishment of a dedicated foreign exchange window by the Central Bank of Nigeria to support the importation of essential raw materials.
According to the group, access to stable foreign exchange is necessary to maintain production levels and prevent supply disruptions.
In addition, stakeholders emphasised the need for improved logistics and trade facilitation policies to reduce delays and costs associated with importing industrial inputs.
Analysts note that prolonged global instability could further strain supply chains and increase inflationary pressures on manufacturers.
The US Iran conflict impact also reflects broader vulnerabilities within Nigeria’s industrial ecosystem, particularly dependence on imported inputs and exposure to global energy price fluctuations.
Experts suggest that strengthening local production capacity and diversifying supply sources could reduce these risks over time.
The ongoing disruptions may affect industrial output, pricing, and competitiveness. Rising costs could lead to higher consumer prices and reduced purchasing power, with potential implications for economic growth.
The situation also highlights the importance of energy and trade policies in supporting domestic industries during periods of global uncertainty.
