High Interest Rates Hurt Nigerian Manufacturers, Says MAN

The Manufacturers Association of Nigeria (MAN) has once again raised concerns over the burden of high interest rates on the nation’s manufacturing sector, warning that the trend leaves Nigerian producers at a competitive disadvantage compared to their global counterparts.

Speaking on the issue, MAN’s Director General, Segun Ajayi-Kadir, welcomed the recent 50 basis points cut in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN), describing it as a positive step that could pave the way for further reductions in lending rates.

He, however, lamented that manufacturers have struggled with elevated borrowing costs for more than five years, driven largely by the apex bank’s aggressive tightening stance.

“With recent reforms moderating inflation, stabilizing the exchange rate, and improving investor confidence, the timing is right for the central bank to gradually relax rates,” Ajayi-Kadir stated.

“We are definitely looking forward to further reduction. If you give a manufacturer anything more than 5% to pay as interest, competitiveness is compromised, as our rivals are borrowing at much lower rates. You are not going to get anything out of it because those with whom you compete are not borrowing at that rate,” he added.

Ajayi-Kadir further called for a special financing window tailored to manufacturers, enabling them to access loans at rates below the MPR. He stressed that such a move is crucial for driving industrial growth and urged the CBN to make an “intentional decision” that would encourage commercial banks to lend more to manufacturers, thereby supporting broader economic expansion.

Last week, the Monetary Policy Committee (MPC) of the CBN reduced the MPR from 27.5% to 27% at its 302nd meeting in Abuja. It also adjusted the asymmetric corridor around the rate to +250 and -250 basis points, down from the previous +500/-100 basis points.

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