Global military tensions involving the United States, Israel, and Iran are sending ripples across international markets, and Nigeria’s industrial sector could be among the hardest hit, according to the Manufacturers Association of Nigeria (MAN). The trade body has cautioned that chemical and pharmaceutical producers in particular face heightened vulnerability as geopolitical shocks reverberate through supply chains and trade networks.
In a statement, MAN’s Director General, Segun Ajayi-Kadir, highlighted the potential economic fallout, noting that the escalating Middle East crisis has sent “shockwaves across the global macroeconomic landscape,” threatening to undermine recent economic gains in Nigeria. These gains include a moderation in inflation, which recently eased to 15.10 per cent, and improved manufacturing capacity utilisation, which had climbed above 60 per cent.
“Global geopolitics has become a direct cost driver for Nigerian manufacturers,” Ajayi-Kadir said. “When the US and Middle East sneeze, the global economy catches a cold, and Nigeria is not an exception.”
Despite rising crude oil prices, currently hovering around $84 per barrel, Nigeria may see limited benefits due to its constrained production output, estimated between 1.3 and 1.4 million barrels per day. This creates a paradoxical situation in which higher prices fail to fully translate into revenue gains, restricting foreign exchange inflows and limiting economic cushioning.
The trade implications are also significant. Nigeria’s exports to the United States, one of its key trading partners, totaled $5.91 billion in 2024—about 9.3 per cent of total exports—while imports from the US were valued at $4.33 billion. Disruptions to global logistics and Middle Eastern shipping routes could escalate freight costs, extend delivery timelines, and fuel imported inflation, MAN warned.
The association also pointed to currency pressures, noting that the strengthening US dollar amid a global flight to safe-haven assets is already putting strain on the naira. “These dynamics have real consequences on factory floors, affecting input costs and operational planning,” the statement added.
A sectoral analysis by MAN revealed that chemical and pharmaceutical manufacturers are particularly exposed. In 2023, chemical products accounted for approximately 88 per cent of Nigeria’s manufactured exports to the US, leaving the sector vulnerable to fluctuations in petrochemical prices. Rising costs for Active Pharmaceutical Ingredients (APIs) and other critical inputs could erode profit margins and weaken export competitiveness.
Other sectors are not immune. The Basic Metal, Iron, and Steel industry faces rising energy costs, while the Food, Beverage, and Tobacco segment may contend with imported inflation on grains and packaging materials. MAN highlighted that these challenges coincide with a broader slowdown in demand, creating a dual pressure on manufacturers.
“The time for reactive measures is over. Nigeria must proactively fortify its manufacturing base to withstand external shocks,” Ajayi-Kadir urged, stressing that the sector’s projected 3.1 per cent growth in 2026 could be at risk without strategic intervention.