The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN) to reconsider its monetary policy stance and implement a rate cut to ease inflation and revive growth in the real sector, especially manufacturing and agriculture.
This call follows the recent decision of the CBN’s Monetary Policy Committee (MPC), which at its 301st meeting held on July 21 and 22, 2025, resolved to retain the Monetary Policy Rate (MPR) at 27.5%.
While acknowledging the committee’s efforts to stabilize key monetary indicators, MAN argued that maintaining the current high rate is not sufficient to tackle inflation or stimulate productive investment.
Manufacturers feeling the squeeze
According to the association, the prolonged contractionary stance of the CBN has significantly strained manufacturers.
- It added that lending rates to the sector have ballooned to over 35%, with ripple effects seen in higher production costs, rising prices of finished goods, lower capacity utilization, and a sharp increase in unsold inventories.
- In 2024 alone, manufacturers’ capacity utilization dropped to 57%, while unsold inventory more than doubled to N2.14 trillion, compared to N1.14 trillion in 2023.
- These trends, MAN noted, are stifling production and disrupting investment plans across the sector.
“The expectation of MAN is to have a rate cut that is supported by a robust fiscal policy framework capable of facilitating improved access to long-term loans, enhanced productivity, and sustained economic growth,” the association said in a statement.
MAN emphasized that reducing the interest rate would help lower the cost of borrowing, attract investment in the real sector, and boost economic activities.
It further urged the federal government to work in synergy with the CBN to implement supportive fiscal measures that would reposition manufacturing as a key growth engine.
Policy recommendations from MAN
As part of its broader recommendation to support the real sector, MAN urged the government and monetary authorities to:
- Reduce interest rates to ease borrowing costs and create room for productive investment.
- Implement a Nigeria First Policy to promote local patronage, backward integration, and domestic raw material sourcing—measures that would ease forex demand pressures.
- Boost food production by tackling insecurity in farming communities and improving agricultural logistics, which would help curb food inflation.
- Promote income redistribution to enhance citizens’ welfare and overall economic performance.
While inflation has eased slightly, dropping to 22.22% in June 2025 from 22.97% in May, food inflation has continued to rise. MAN believes that a policy shift that supports domestic production, reduces input costs, and stimulates consumer spending is essential to unlock sustained economic growth.
Backstory
The CBN at the end of its Monetary Policy Committee (MPC) meeting held on Tuesday, July 22, 2025, announced the retention of the Monetary Policy Rate (MPR) at 27.5%.
CBN Governor, Dr. Olayemi Cardoso, who briefed journalists after the meeting, said the committee’s decision to hold the rate steady was based on the need to sustain the disinflationary trend in the economy.
All 12 members of the MPC voted unanimously to maintain the MPR at 27.5%, signaling a unified stance among policymakers amid lingering inflationary pressures and exchange rate volatility.
