The Manufacturers Association of Nigeria (MAN) has issued a blunt and urgent warning: the escalating geopolitical crisis between the United States, Israel and Iran is already sending tremors through the global economy that could swiftly unravel Nigeria’s fragile manufacturing recovery and wipe out hard-won macroeconomic gains.
In a detailed position paper released today, MAN’s Director General, Segun Ajayi-Kadir, painted a sobering picture of an industry caught in the crossfire of distant conflict. Just as Nigeria’s headline inflation had eased to a more manageable 15.10 per cent and factory capacity utilisation had clawed its way back above the psychologically important 60 per cent threshold, the Middle East flare-up has introduced a new and dangerous variable.
“This sudden geopolitical shock could reverse the hard-won macroeconomic gains,” Ajayi-Kadir stated plainly.
The mechanics of the threat are already visible on trading screens and shipping manifests worldwide. Brent crude has surged above $84.50 per barrel. Shipping routes are being redrawn to avoid the Red Sea corridor and the Strait of Hormuz, driving freight rates and war-risk insurance premiums sharply higher. Energy markets are swinging wildly. For an oil-producing nation like Nigeria, the instinctive reaction might be optimism. Yet Ajayi-Kadir was quick to puncture that illusion.
“Although higher oil prices should ordinarily boost Nigeria’s foreign exchange earnings and strengthen the naira, the country’s low crude production level—estimated at between 1.3 and 1.4 million barrels per day—limits its ability to benefit fully from the price surge,” he explained.
The numbers tell a story of missed opportunity and heightened vulnerability. Nigeria exported goods worth $5.91 billion to the United States in 2024, accounting for 9.3 per cent of the country’s total exports. Imports from the US stood at $4.33 billion. That deep commercial relationship is now at risk of disruption as global supply chains buckle.
MAN identified three immediate and interlocking dangers for Nigerian manufacturers: spiralling energy costs, escalating freight charges, and a looming collapse in consumer demand. Diesel and gas prices are climbing fast enough to erase operating margins. Raw materials are taking longer to arrive and costing more when they do. The inevitable result, the association warned, will be imported inflation that further squeezes household budgets and leaves factories staring at growing piles of unsold inventory.
Certain sectors stand in the direct line of fire. The chemical and pharmaceutical industry, which accounts for a staggering 88 per cent of Nigeria’s manufactured exports to the United States, depends heavily on petrochemical derivatives that move in lockstep with crude prices. The basic metal, iron and steel sector is equally exposed, its furnaces guzzling energy that is becoming prohibitively expensive. Even the food, beverage and tobacco cluster—usually more resilient—faces rising costs for imported grains and packaging materials that will eventually be passed on to already-stretched consumers.
MAN did not hesitate to draw a painful historical parallel. During the US-Iraq War, Nigeria’s manufacturing exports plummeted from $901.35 million in 2002 to just $496.87 million in 2003. Manufacturing GDP growth swung violently from +17.74 per cent to -10.8 per cent in a single year. “We cannot afford to repeat the mistakes of the early 2000s,” Ajayi-Kadir cautioned, “when oil price gains were not translated into industrial growth.”
The association was equally candid about Nigeria’s structural weaknesses. “Continued reliance on imported raw materials leaves the sector highly vulnerable to external shocks,” it noted. Nigeria cannot dictate events in the Middle East, but it can—and must—act decisively at home to shield its industrial base.
To that end, MAN laid out a clear and immediate set of demands to the Federal Government:
– Fast-track energy transition initiatives specifically tailored for industries;
– Guarantee foreign exchange availability for the importation of critical raw materials;
– Prioritise the domestic supply of refined petroleum products to local manufacturers;
– Suspend all logistics and haulage levies for at least the next six months.
Without these measures, the association warned, factory closures and widespread job losses are not a distant possibility but a looming reality.
In its conclusion, MAN struck a note of cautious optimism amid the gloom. The current crisis, it argued, should be seized as a catalyst rather than feared as a catastrophe. “Nigeria must use this global shock as an opportunity to strengthen local manufacturing and reduce dependence on external supply chains,” the paper stated. “Only genuine manufacturing autonomy will deliver the economic stability the nation so desperately needs.”
As the smoke rises over the Middle East and oil tankers reroute around troubled waters, Nigerian manufacturers are watching nervously. The next few weeks will test whether Abuja is prepared to listen—and to act—before the geopolitical storm engulfs the factory floor.
WHAT YOU SHOULD KNOW
The escalating US-Israel-Iran geopolitical crisis poses a serious threat to Nigeria’s fragile manufacturing recovery.
Despite higher global oil prices, low domestic crude production (1.3–1.4 million bpd) limits benefits, while rising freight costs, energy prices, and imported inflation risk reversing recent gains in inflation control and factory capacity utilisation.
Nigeria’s heavy reliance on imported raw materials and unstable energy supply makes its manufacturing sector highly vulnerable to external shocks, even when oil prices rise.
Without urgent government action to guarantee forex for raw materials, prioritise local refined fuel supply, and suspend logistics levies, factory closures and lost of jobs could follow quickly.
Nigeria must turn this crisis into a catalyst for genuine local manufacturing autonomy rather than repeat past mistakes.
