Nigerian manufacturers have called on the Central Bank of Nigeria (CBN) to lower the country’s benchmark interest rate, warning that current monetary policies are significantly hampering industrial growth and threatening the viability of local production.
The Manufacturers Association of Nigeria (MAN) expressed concern that the sustained high-interest environment is pushing borrowing costs beyond manageable levels for businesses. According to MAN, financial costs for manufacturers jumped by over 44% in one year—from ₦1.43 trillion in 2023 to ₦2.06 trillion in 2024—with the trend still rising.
The appeal follows the CBN’s decision at its 300th Monetary Policy Committee (MPC) meeting to maintain all key policy rates. The Monetary Policy Rate (MPR) remains at 27.5%, with other parameters such as the Cash Reserve Ratio (CRR) for commercial and merchant banks kept at 50.0% and 16.0% respectively, and the liquidity ratio at 30.0%.
MAN Director-General, Segun Ajayi-Kadir, criticized the decision, saying it runs counter to global trends where central banks have opted to cut rates to drive investment and stimulate production. “The current interest rate framework makes Nigeria one of the most expensive countries in terms of borrowing costs,” he said.
He noted that lending rates often surpass 37%, a development that has strained manufacturers’ capacity to maintain operations, scale up production, or make long-term investments. “This jeopardizes policies aimed at boosting domestic manufacturing, including the Nigeria First initiative,” Ajayi-Kadir added.
Recent figures show that the MAN CEO Confidence Index dropped from 50.7 to 48.3 points, reflecting growing pessimism among industry leaders. While high rates may draw foreign capital seeking returns, Ajayi-Kadir argued that they are undermining the productive base of the economy.
The association is advocating for a significant downward revision of the MPR and the creation of targeted incentives for commercial lenders to offer more affordable credit. MAN is also proposing a ₦1 trillion relief fund for struggling manufacturers and an increase in the Bank of Industry’s capital base to support long-term industrial financing.
In a similar vein, Dr. Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), cautioned against maintaining a tight monetary stance indefinitely. While acknowledging a slight drop in headline inflation to 23.71%, she emphasized the need for a strategy that supports both price stability and real sector recovery.
According to Almona, Nigeria’s economic outlook remains constrained by currency volatility, structural inefficiencies, and inflationary pressure. She warned that prematurely slashing rates could deter foreign investors but insisted that a balanced, data-led path to monetary easing is necessary.
She proposed a coordinated fiscal and monetary response, advocating production-oriented reforms, transparent interest rate regimes, and more robust support for small and medium-scale enterprises (SMEs).
As stakeholders continue to weigh the costs and benefits of Nigeria’s current monetary trajectory, pressure is mounting on the CBN to revisit its policy framework in favor of a more industrial-friendly environment.
