MAN urges the CBN to cut punitive interest rates, warning that high borrowing costs are damaging production and weakening competitiveness in the real sector.

The Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, on Wednesday urged the Central Bank of Nigeria to cut the existing CBN interest rates, warning that the current lending climate is stifling production and eroding competitiveness across the country’s manufacturing sector.

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Ajayi-Kadir said the association acknowledged the Monetary Policy Committee’s decision to hold the Monetary Policy Rate at 27 per cent following its November meeting in Abuja, but he stressed that manufacturers had expected a further reduction in borrowing costs.

He described the prevailing rates, which he said range between 30 and 37 per cent for many operators, as restrictive and damaging to industrial performance.

He explained that although the MPC highlighted a slowdown in inflation and a faster pace of disinflation, easing alone would not translate into growth without cheaper credit for producers.

He said the high rate environment continues to hinder expansion, limit investment, and weaken the ability of firms to compete globally.

The Director General warned that small and medium manufacturers remain especially vulnerable, as they face a combination of rising finance costs and long-standing structural barriers including weak infrastructure, expensive logistics, erratic electricity supply, soaring energy prices, and persistent insecurity.

He noted that these pressures collectively drive up production costs and endanger jobs.

Ajayi-Kadir encouraged the central bank and fiscal authorities to strengthen policy coordination and pursue reforms that unlock industrial potential.

He called for additional credit-support instruments, improved fiscal discipline, and greater investment in transport networks, power supply, and logistics to boost national output.

The association also urged closer collaboration between the government and the apex bank to stabilise the naira and manage risks linked to capital flight following new corridor adjustments expected to push banks to lend more.

It added that insecurity in agricultural and industrial zones must be addressed urgently to protect raw material supply chains and support food production.

While commending the MPC for steps aimed at improving liquidity and encouraging lending, Ajayi-Kadir said policymakers must seize the moment to drive credit-led growth.

He argued that only a determined downward review of rates in future committee meetings will provide the impetus needed for long-term industrial investment.

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He concluded by reaffirming MAN’s appreciation of the central bank’s efforts to maintain economic stability, but emphasised that stronger coordination between fiscal and monetary authorities remains essential to ensure that policy decisions deliver real gains in the productive sector and promote broader economic development.