Middle East crisis: Chemical, pharma manufacturers at highest risk — MAN

2026-03-29 - 21:34

By Yinka Kolawole The Manufacturers Association of Nigeria (MAN) has raised alarm over the escalating military confrontation involving the United States, Israel and Iran, warning that Nigeria’s chemical and pharmaceutical manufacturers face the gravest risk as global economic shocks ripple through the industrial sector. In a statement, Director General of MAN, Segun Ajayi-Kadir, said the intensifying Middle East crisis has sent “shockwaves across the global macroeconomic landscape,” threatening to reverse recent gains in Nigeria’s economy, including easing inflation, which recently moderated to 15.10 per cent, and improved manufacturing capacity utilisation that had climbed above 60 per cent. According to him, global geopolitics has become a direct cost driver for Nigerian manufacturers. “When the US and Middle East sneeze, the global economy catches a cold, and Nigeria is not an exception,” he stated. Despite rising global crude oil prices, which recently hovered around $84 per barrel, MAN noted that Nigeria stands to gain little due to its weak production output, estimated between 1.3 and 1.4 million barrels per day. This, it said, creates a paradox where the country benefits from price gains but loses out on volume-driven revenue, limiting foreign exchange inflows. “The crisis also threatens Nigeria’s trade relations with the United States, one of its key partners. Nigeria’s exports to the US stood at $5.91 billion in 2024, representing 9.3 per cent of total exports, while imports were valued at $4.33 billion,” he added. MAN warned that disruptions in global logistics and Middle Eastern transit routes could trigger higher freight costs, longer delivery timelines and imported inflation. “The strengthening of the US dollar amid a global flight to safe-haven assets is already exerting renewed pressure on the naira, with consequences that will be felt directly on factory floors,” the Association added. Sectoral analysis by MAN showed that the Chemical and Pharmaceutical group is the most vulnerable. In 2023, chemical products accounted for about 88 per cent of Nigeria’s manufactured exports to the US, underscoring the sector’s exposure to global petrochemical price volatility. Rising costs of Active Pharmaceutical Ingredients (APIs) and other inputs could erode margins and threaten export competitiveness. Similarly, the Basic Metal, Iron and Steel sector faces mounting operational costs due to its heavy dependence on energy, while the Food, Beverage and Tobacco segment is expected to grapple with imported inflation on grains and packaging materials. MAN warned that manufacturers now face a dual challenge of rising production costs and weakening demand, which could derail the sector’s projected 3.1 per cent growth in 2026. “The time for reactive measures is over. Nigeria must proactively fortify its manufacturing base to withstand external shocks,” MAN stated.