Operators in Nigeria’s manufacturing sector have raised alarms over the country’s persistently high lending rate of 36.6 per cent, which they describe as “restrictive” and detrimental to industrial growth.

According to the Manufacturers Association of Nigeria (MAN), access to credit for manufacturers fell to ₦7.72 trillion as of March 2025, down from ₦8.53 trillion in December 2024—a reduction of ₦810 billion. MAN officials say the high cost of borrowing is limiting production and undermining the sector’s competitiveness.

In its annual ‘Manufacturing State of Affairs’ report, MAN welcomed the Central Bank of Nigeria’s (CBN) recent cut of the Monetary Policy Rate (MPR) to 27 per cent, describing it as a “commendable policy shift.” However, MAN stressed that a deeper rate cut is needed to meaningfully lower the cost of credit and stimulate investment in the real sector.

“Growth cannot thrive where capital remains prohibitively expensive,” said MAN Director-General Segun Ajayi-Kadir, highlighting that credit to the private sector also fell slightly to ₦75.83 trillion in August 2025 from ₦76.13 trillion in June 2025.

Ajayi-Kadir pointed out that the high lending rate, combined with structural challenges such as poor infrastructure, high logistics costs, unreliable electricity, high energy expenses, and insecurity, has driven up production costs and weakened competitiveness.

To support manufacturers, he proposed the creation of a Manufacturing Refinancing and Rediscounting Facility (MRRF), allowing banks to refinance approved manufacturing loans at single-digit rates for up to seven years. He also recommended:

• Establishing a publicly accessible dashboard tracking lending flows and sectoral disbursement patterns
• Introducing additional policy incentives to boost credit flow to manufacturers
• Approving a ₦1 trillion stabilization fund for manufacturers
• Increasing the capital base of the Bank of Industry (BoI) to meet industrial credit demand
• Advocating for a Manufacturers Bank offering long-term concessionary loans

Ajayi-Kadir warned that without these measures, especially for Small and Medium Industries (SMIs), access to affordable financing will remain limited, stifling growth.

PwC Nigeria has projected that credit conditions may remain tight in 2026 due to constraints on both the supply and demand sides, reinforcing MAN’s call for targeted interventions to support the sector.