The Manufacturers Association of Nigeria (MAN) has expressed concern over the decision of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) to retain its contractionary monetary stance following its 301st meeting held on July 21 and 22, 2025. While MAN acknowledges the slight decline in headline inflation to 22.22 per cent in June 2025 from 22.97 per cent in May, the Association notes with caution the continued rise in food inflation and its implications for the manufacturing ecosystem and national productivity.
The MPC resolved to maintain the Monetary Policy Rate (MPR) at 27.5 per cent, along with other tightening measures, citing underlying price pressures and economic uncertainty. However, MAN maintains that the prolonged high-interest regime is proving detrimental to the manufacturing sector. The current lending environment has driven average borrowing rates for manufacturers above 35 percent, significantly raising production costs, reducing capacity utilization, and increasing the inventory of unsold goods.
In 2024 alone, the sector recorded a capacity utilisation rate of just 57 per cent, while inventory of unsold goods surged to N2.14 trillion, up from N1.14 trillion in 2023. These adverse trends have compounded uncertainty, disrupted investment plans, and further strained competitiveness in the local and international markets.
“While we commend the MPC for its sustained efforts to stabilize macroeconomic indicators and curb inflation, it is clear that maintaining the current interest rate will not sufficiently stimulate growth or reposition the economy for sustainable development, we strongly believe that a cut in the MPR, alongside robust fiscal support, is urgently needed to ease the cost of doing business and unlock new investments in the real sector.”
In light of these challenges, MAN is advocating for the following measures:
- A gradual reduction of interest rates to support domestic production and ease inflationary pressure.
- Stronger fiscal-monetary coordination to offer stimulus packages and long-term loans to manufacturers.
- Implementation of the Nigeria First Policy to promote local patronage and backward integration.
- Enhanced security in farming communities and logistics corridors to stabilize food prices.
- Policies that improve income distribution, citizens’ welfare, and broader economic performance.
As Nigeria seeks pathways to economic recovery and inclusive growth, MAN urges the Federal Government and the CBN to adopt a more production-led approach to monetary and fiscal policymaking, prioritising the growth of the real sector as the foundation for long-term economic resilience.
