The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN) to urgently reduce the Monetary Policy Rate (MPR), which stands at 27.5 percent. This request follows the recent Monetary Policy Committee (MPC) meeting held in Abuja, where the CBN decided to maintain the current rate, unchanged since November 2024.
MAN says that the current rate is too high and is making it very difficult for manufacturers in the country to survive. The group argues that such a high interest rate is hurting local industries, increasing their debt, and reducing productivity. According to them, keeping the rate at 27.5 percent is forcing many companies, especially small and medium-sized ones, to reduce operations or shut down.
The association believes the CBN is prioritizing short-term foreign investments over the long-term stability of domestic manufacturing. They say this policy attracts foreign investors who are only interested in quick profits, while the real economy suffers. MAN argues that this focus on foreign portfolio investment could damage the foundation of Nigeria’s industrial growth.
High interest rates are pushing up borrowing costs. Many manufacturers now face lending rates above 37 percent, which they say is unsustainable. This situation has made it harder for businesses to get affordable credit. As a result, many are struggling to pay for raw materials, maintain equipment, or expand production.
Data from the manufacturing sector shows a significant rise in borrowing costs. In 2023, total financing costs stood at ₦1.43 trillion. By 2024, that figure had jumped to ₦2.06 trillion. This 44 percent increase has directly affected productivity and forced many companies to cut back on their operations.
MAN warns that if the high interest rate continues, local production will fall further. This could lead to more dependence on imported goods, which the group says will worsen poverty in the country. They believe that Nigeria needs to produce more goods locally to grow its economy and create jobs. But to do this, manufacturers need cheaper loans and better access to financing.
The group also points out that inflation in Nigeria is beginning to ease. This improvement in inflation trends, they argue, creates an opportunity for the CBN to reduce interest rates. According to MAN, maintaining such a high rate is no longer needed and will only make things worse for both producers and consumers.
They add that the current policy is not just limiting business growth but also reducing the return on investments in the sector. This, in turn, is discouraging further investment. Without action, the association warns that Nigeria risks turning into a country where banks store wealth, while industries suffer and jobs disappear.
MAN is asking the CBN to take urgent steps to adjust its policies to support local manufacturing. They say that the future of the country’s economy depends on a strong and growing industrial sector. Lowering the interest rate, they believe, is a necessary move to avoid long-term damage to the economy.
Nigeria is already one of the most expensive places to borrow money. If the trend continues, local businesses may lose their ability to compete with imported goods. This would hurt the country’s trade balance and increase its dependence on foreign products. A shift in policy could help turn this around.
As the conversation continues, all eyes will be on the CBN’s next meeting. If the economic conditions remain stable, there may be room for the central bank to consider a lower interest rate. For now, manufacturers hope their call for help will not go unheard.
