The Manufacturers Association of Nigeria has raised concerns about elevated interest rates in the country, arguing that current borrowing costs are undermining the competitiveness of Nigerian manufacturers in the global market.
Segun Ajayi-Kadir, Director General of MAN, welcomed the Central Bank of Nigeria’s recent decision to reduce the Monetary Policy Rate by 50 basis points but emphasized that more substantial cuts are necessary to support the manufacturing sector. He expressed hope that this initial adjustment would encourage commercial banks to lower their lending rates.
Ajayi-Kadir pointed out that manufacturers have struggled with expensive credit over the past five years as a result of the central bank’s stringent monetary tightening measures. He noted that recent economic reforms have helped control inflation, stabilize the naira, and restore investor confidence, creating favorable conditions for the CBN to ease interest rates further.
The MAN chief stressed that interest rates exceeding five percent place Nigerian manufacturers at a significant disadvantage compared to international competitors who have access to cheaper financing. He warned that without more affordable credit, local producers cannot compete effectively in regional and global markets.
He called on the CBN to establish a dedicated financing facility that would allow manufacturers to obtain loans at rates below the current MPR. According to Ajayi-Kadir, such an initiative would be essential for stimulating industrial expansion and encouraging commercial banks to increase lending to the manufacturing sector, ultimately contributing to broader economic growth.
Last week, the Monetary Policy Committee held its 302nd meeting in Abuja, where it decided to lower the MPR from 27.5 percent to 27 percent. The committee also adjusted the asymmetric corridor around the benchmark rate to plus or minus 250 basis points, narrowing it from the previous range of plus 500 and minus 100 basis points.
