The Manufacturers Association of Nigeria (MAN) has expressed optimism that the recent decision by the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) to lower the Monetary Policy Rate (MPR) by 50 basis points will pave the way for deeper cuts in lending rates to support the country’s struggling manufacturing sector.
Speaking on Tuesday during a press conference ahead of MAN’s 2025 Annual General Meeting, Director-General Segun Ajayi-Kadir said manufacturers have endured five years of elevated borrowing costs driven by an aggressive tightening stance from the MPC.
With recent reforms moderating inflation, stabilizing the exchange rate, and improving investor confidence, he noted that the timing was right for the central bank to gradually relax rates.
“We are definitely looking forward to further reduction. If you give a manufacturer anything more than 5% to pay as interest, you are not going to get anything out of it because those with whom you compete are not borrowing at that rate,” Ajayi-Kadir said.
Special window for manufacturers
While noting that high interest rates continue to place Nigerian manufacturers at a competitive disadvantage globally, the MAN DG also called for the creation of a special window for the manufacturers to allow them to borrow at rates lower than the MPR.
According to him, this type of special concession is key to driving growth in the manufacturing sector of the economy.
He urged the CBN to make an “intentional decision” that will make commercial banks more comfortable to lend and contribute to significantly to economic growth.
“Nigeria First” policy in focus
MAN’s President, Otunba Francis Meshioye, also used the platform to highlight ongoing policy shifts that could help unlock growth opportunities for local industries.
- He pointed to the recently introduced “Nigeria First” policy, which requires Ministries, Departments, and Agencies (MDAs) to prioritize locally produced goods and services.
- According to Meshioye, the policy marks “a turning point for our nation” and reflects a strong commitment by the government to promote industrialization, strengthen local value chains, and shift the economy from being consumer-driven to production-led.
- He, however, cautioned that the success of the policy will depend on deliberate and inclusive implementation, alongside efforts to address structural challenges around infrastructure, regulation, and financing gaps.
He noted that this year’s MAN AGM, themed “Nigeria First: Prioritizing Patronage of Made in Nigeria,” will provide a platform to deepen conversations on how to drive sustainable industrial growth and employment generation through stronger support for local manufacturers. Africa’s foremost industrialist, Aliko Dangote, will deliver the keynote address.
Backstory
The CBN Monetary Policy Committee (MPC) had last week reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5% to 27%.
The decision was announced by CBN Governor, Olayemi Cardoso, during the post-MPC press briefing on Tuesday, following the Committee’s 302nd meeting in Abuja.
Alongside the MPR cut, the MPC narrowed the asymmetric corridor around the benchmark rate to +250 and -250 basis points, from the previous +500/-100 basis points.
I don’t think it’s healthy for manufacturers to pressure the CBN into cutting rates further when inflation is still high.
A better approach is to ease their cost of borrowing through targeted fiscal tools. For example, government could speed up VAT refunds so manufacturers aren’t left waiting months for cash that ties up their working capital. Other options include accelerated depreciation on new equipment or export tax credits. These kinds of policies would give manufacturers real relief without undermining monetary policy or risking a return to high inflation.