For the records: Position of Manufacturers Association of Nigeria on the Report of Monetary Policy Committee Meeting Held on March 25-26, 2024

Manufacturers Association of Nigeria MAN


The Nigerian economy has encountered a range of challenges in recent years, such as foreign exchange instability, escalated energy prices and food insecurity that have heightened the inflationary pressures and grossly eroded the consumers’ purchasing power. These issues have had a negative impact on the manufacturing sector, leading to decreased production and reduced competitiveness.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 294th meeting on the 25th and 26th of March 2024 to evaluate recent economic and financial developments and assess potential risks to the economy’s outlook.The committee acknowledged the persistent increase in headline inflation, primarily fueled by rising food prices due to supply constraints and high costs associated with logistics and distribution, while affirming the need to address the challenge of food insecurity to tame the prevailing inflationary pressures. Consequently, the MPC sustained its tightening measures after thoroughly evaluating associated risks and the short-term inflation forecast,

  1. Decision of the MPC

At the end of the meeting, the committee decided to further tighten monetary policy as follows-Raise the MPR by 200 basis points to 24.75 per cent from 22.75 per cent; adjust the asymmetric corridor around the MPR to +100/-300 basis points; retain the Cash Reserve Ratio (CRR) of Deposit Money Banks at 45.0 per cent; adjust the Cash Reserve Ratio of Merchant Banks from 10.0 per cent to 14.0 percent and retain the Liquidity Ratio at 30.0 percent.


In broad terms, the implications of maintaining the same pattern of monetary policy decisions in the last two years is evident in the continuous macroeconomic instability prevalent in the economy with overwhelming impact on the manufacturing sector in Nigeria. This is worsened by the multidimensional binding constraints responsible for the lackluster performance of the manufacturing sector in Nigeria. Undoubtedly, macroeconomic instability will continue to disrupt production plans, jeopardize investments, and cloud the sector’s prospects.

In specific terms, the current MPC decisions will further limit credit interventions, increase the cost of loans, upscale production cost, reduce access to funds, manufacturing investment and competitiveness. For instance, the current monetary stance will amongst others result in:

  • Further Decline in Manufacturing Competitiveness

The higher cost of doing business will be further exacerbated by the decision of MPC, thereby worsening competitiveness of Nigerian products in the global market, which is evident in the drastic reduction in global demand for these products. Data provided by the World Trade Organisation, revealed that South African manufacturing export value was $46 billion, while that of Nigeria was $3billion in 2022. Clearly, this is over 15 times greater than Nigeria’s manufacturing export value in that year. The reduction in global demand for Nigerian products was further buttressed by NBS report that confirmed that manufacturing export value of Nigeria plummeted by 166 percent from N2.07 trillion in 2019 to N778.44 billion in 2023.

In addition, the exorbitant lending rate of over 30 percent has contributed largely to a drop in the share of manufacturing export to non-oil export from 82.4 percent to 24.8 percent in 2019 and 2023 respectively.

  • Disruption of Manufacturing Value Chain

The resultant increase in the cost of servicing loans is a threat to the financial stability of manufacturing companies. The increase will destabilize manufacturers through the disruption of production plans, avoidable stock-out situations, and decreased capacity utilization. Clearly, all of these could lead to downsizing of workers, closure of more companies, upscaling of social vices and insecurity in Nigeria.

2.3  Further Reduction in Access to Credit

The increase in Merchant Banks’ CRR and the narrowing of the asymmetric corridor will further reduce the capacity of banks to lend to the productive sector, such as manufacturing. These, in addition to the high interest rates, will limit backward integration, research & development and innovation needed to enhance productivity and rapid industrial-led economic growth.


The Manufacturers Association of Nigeria acknowledges the frantic efforts of the MPC aimed at addressing the economic challenges facing the country particularly the instability in inflation and exchange rates. MAN recognizes the rationale behind the decision but, it is essential for the committee to carefully consider the potential impact of the decisions on manufacturing and collaborate with fiscal authorities to support the sector to play its traditional role as a critical driver of meaningful employment, improved productivity, steady forex proceeds inflow and sustained economic growth.

It is worth noting that this approach of increasing the MPR has been adopted for almost 2 years without positive result. The Association expected the new CBN administration to consider other measures to combat the pressure particularly addressing the causes of the increase which are majorly cost-push factors.

MAN urges the MPC to carefully consider the impact of these monetary policy measures on the manufacturing sector and the broader economy. It is crucial to strike a balance between addressing macroeconomic challenges and supporting the growth and sustainability of the manufacturing industry. In the light of the aforementioned, we recommend a robust synergy between the monetary and fiscal authorities as well as the consideration of the following policy measures:

  • Ensure adequate security in farming areas and business environments by fast-tracking the passage of the Police Reform Bill and investing significantly in data platforms, surveillance systems and community policing.
  • Stabilise the value of the naira by managing the floating exchange rate within a business-friendly threshold and intensify ongoing reforms to boost the level of liquidity and degree of transparency in the official forex window.
  • Prioritise forex and credit allocation to the manufacturers and fast track the proposed recapitalization of the banking sector.
  • Further reduce the reliance of the country on imported products and raw materials by providing incentives for investment in backward integration and local sourcing to reduce the pressure on the dollar to the barest minimum.
  • Prioritise the provision of infrastructure in industrial hubs and boost nationwide investment in renewables to reduce logistics cost and promote competitiveness.

Segun Ajayi-Kadir,mni

Director General


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