The Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria to further cut interest rates, noting that the high cost of borrowing still hinders production and undermines competitiveness in the real sector.
The association made the call while reacting to the recent decision of the Monetary Policy Committee (MPC) of the CBN to maintain the benchmark interest rate at 27 per cent and adjust the Standing Facilities Corridor to +50/-450 basis points.
At the 303rd MPC meeting held on November 24 and 25 at the CBN headquarters in Abuja, the committee also voted to retain the Cash Reserve Ratio at 45 per cent for commercial banks and 16 per cent for merchant banks and left the liquidity ratio unchanged at 30 per cent.
While acknowledging the continued easing of the inflation rate, now at 16.05 per cent as of October 2025, the committee stressed the need to sustain the progress made so far in bringing down the inflation rate.
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However, in a statement released on Wednesday, Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, lamented that the interest rate still remains high and puts an enormous burden on businesses that bear the elevated cost of borrowing.
While appreciating the CBN for halting the increase in interest rate, Ajayi-Kadir said manufacturers had expected a further cut to reduce borrowing costs, which currently range between 30 and 37 per cent.
The MD pointed out that a high interest rate not only impedes production but also reduces the sector’s competitiveness.
He emphasised that, while exchange rate stability and increased foreign exchange liquidity are critical for firms that rely on imports, lowering financing costs is also necessary to boost expansion and investment.
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Ajayi-Kadir warned that persistently high lending rates limit access to affordable finance, particularly for small and medium-sized businesses (SMEs).
He also mentioned that the manufacturing sector is dealing with a couple of structural issues, such as inadequate infrastructure, high logistics costs, unreliable electricity supply, high energy costs, and insecurity, all of which contribute to rising production costs and eroded competitiveness.
To address these concerns, MAN asked the Central Bank and policymakers to implement programmes that promote equitable growth, incentivise manufacturing, and eliminate the barriers that impede the sector’s growth.
The association called for collaboration between the CBN and fiscal authorities, stressing that it is “vital to drive reforms that unlock the manufacturing sector’s full potential.”
The group urged the CBN to consider lowering rates during the upcoming MPC meetings. According to the MAN DG, this would boost long-term investments, particularly in capital-intensive industrial sectors, and lessen the burden of high borrowing costs.
The association of manufacturers also called on the government to implement what it described as “complementary fiscal measures” and structural reforms targeting key sectors such as agriculture, manufacturing, and energy.
It asked the CBN to monitor and evaluate the effects of previous MPC decisions on loan access in the real sector in order to make more informed choices at future sessions.
It emphasised that while the change to the MPC’s corridor is a hopeful start towards building a more accommodating lending climate, the government must take this opportunity to support credit-led growth, particularly in productive sectors.
The group expressed confidence that implementing fiscal discipline, structural reforms, and stronger coordination between fiscal and monetary authorities would help to achieve a positive impact on the manufacturing sector and sustainable economic development generally.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
