Growing strain on Nigeria’s industrial base has raised fresh alarms among economic experts, as a sharp drop in quarterly manufacturing tax revenues highlights deepening operational challenges across key business hubs.
​Speaking at an emergency macroeconomic review session in Lagos on Monday, executive members of the Alliance for Economic Research and Ethics (AERE) cautioned that declining revenue collections from the productive sector are a symptom of shrinking output, rising costs, and dwindling profit margins rather than simple tax evasion.
​According to financial analysis presented by AERE Lead Economist Dr. Amara Ike, taxes collected from corporate manufacturers experienced a sharp drop in the opening quarter of 2026, mirroring a broader slowdown in industrial power consumption and domestic production indices across major manufacturing belts in Ogun, Lagos, and Kano states.
​”The numbers coming from the manufacturing sector are a clear distress signal,” Dr. Ike stated. “When factory tax contributions collapse quarter-on-quarter, it signals that factories are shuttering lines, laying off workers, and cutting back on raw material purchases to survive.”
​The research body identified several compounding economic pressures responsible for the sector’s distress which includes Escalating Power Expenses, Persistent FX Backlogs and High Cost of Borrowing.
Industrial plants now allocate up to 40 per cent of their overhead directly to alternate power generation amid ongoing grid instability and elevated diesel prices.
​To halt further contraction, AERE urged coordinated fiscal and monetary intervention from the Federal Government and the Central Bank of Nigeria (CBN).
AERE concluded that restoring industrial productivity must take precedence over aggressive revenue target enforcement, warning that revenue collection cannot thrive on a contracting industrial base.
