Manufacturers Warn N1.92t Credit Decline Threatens Nigeria’s Industrial Growth

June 25 () — The Manufacturers Association of Nigeria (MAN) has raised concerns over a sharp decline in bank lending to the manufacturing sector, warning that the trend could undermine industrial growth, worsen unemployment, and slow the implementation of the Nigeria Industrial Policy (NIP) 2025.

In a statement, MAN Director-General, Segun Ajayi-Kadir, said credit to manufacturers contracted by about N1.92 trillion, representing a 22.5 percent decline, despite the sector’s critical role in driving economic growth, job creation, and value addition.

According to him, sustainable industrial development depends heavily on access to affordable financing, and reduced credit availability could constrain expansion plans, delay investments in new technologies, and weaken the competitiveness of local manufacturers.

“The Nigerian manufacturing sector cannot thrive without sustainable and growing financial support. Reduced access to credit limits, expansion, innovation, and competitiveness,” he said.

MAN identified high borrowing costs as one of the biggest challenges facing manufacturers.

The association noted that average prime lending rates stood at about 27 percent as of May 2026, while maximum lending rates had risen to 35.6 percent, making long-term industrial investments increasingly difficult.

The group also expressed concern over the Central Bank of Nigeria’s Cash Reserve Ratio (CRR), estimated at between 45 and 50 percent for commercial banks, arguing that it significantly reduces the volume of funds available for lending to productive sectors.

In addition, MAN lamented the continued delay in implementing the proposed N1 trillion Manufacturing Stabilisation Fund, which was included in the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP) in 2024.

The association further noted that the suspension of new applications under the CBN’s development finance programmes, including the Real Sector Support Fund (RSSF), has pushed manufacturers into the commercial lending market, where financing costs remain prohibitive.

MAN warned that continued contraction in manufacturing credit could reduce capacity utilisation, limit the sector’s contribution to GDP, and weaken job creation.

It called for urgent reforms to create dedicated financing mechanisms that support long-term industrial growth and strengthen Nigeria’s industrialisation agenda.