The Manufacturers Association of Nigeria (MAN) has voiced its concerns regarding the outcome of the 301st Monetary Policy Committee (MPC) meeting held by the Central Bank of Nigeria (CBN) on July 21 and 22, 2025. At the meeting, the MPC chose to maintain its contractionary policy stance, retaining the Monetary Policy Rate (MPR) at 27.50 percent. The asymmetric corridor around the MPR was kept at +500/-100 basis points, while the Cash Reserve Ratio (CRR) remained at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks. The Liquidity Ratio was sustained at 30 percent.
The committee acknowledged a slight decline in headline inflation, which dropped from 22.97 percent in May to 22.22 percent in June 2025. However, it noted with concern the rise in food inflation, which climbed from 21.14 percent to 21.97 percent over the same period. MAN emphasized that the current monetary policy environment continues to exert significant pressure on manufacturers and the broader real sector.
According to the Association, the continued implementation of tight monetary measures has led to an untenable interest rate landscape for manufacturers, with average lending rates surpassing 35 percent as of January 2025. This sharp rise in financing costs has triggered a cascade of adverse effects, including inflated production costs, weakened competitiveness, and disrupted investment planning. The sector has also faced declining capacity utilization, reported at 57 percent in 2024, and a concerning build-up of unsold inventory, which ballooned to ₦2.14 trillion from ₦1.14 trillion in the preceding year.
In light of these developments, MAN has called for a recalibration of Nigeria’s monetary framework. The Association strongly recommends a measured reduction in interest rates to ease borrowing constraints and stimulate investment within the manufacturing sector. Additionally, MAN urges the implementation of a “Nigeria First” policy to promote local patronage, incentivize backward integration, and prioritize domestic sourcing of raw materials—actions that would significantly reduce the nation’s reliance on foreign exchange and bolster economic resilience.
MAN further stressed the urgency of addressing insecurity in agricultural communities and improving transport logistics as part of a comprehensive strategy to curb food inflation and stabilize supply chains. Beyond macroeconomic adjustments, the Association highlighted the importance of introducing redistributive policies aimed at enhancing household welfare and supporting equitable economic performance.
While commending the MPC’s consistent efforts to stabilize monetary indicators, the Manufacturers Association of Nigeria asserts that monetary tightening alone cannot deliver sustainable growth. A collaborative approach between monetary and fiscal authorities, coupled with sector-specific interventions, is essential to reposition Nigeria’s economy and reinforce the manufacturing sector as a foundation for inclusive national development.
