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MAN Calls For Urgent Interest Rate Cut to Protect Nigeria’s Industrial Base

Published

7 months ago

May 21, 2025

243 Views

The Manufacturers Association of Nigeria (MAN), has called for an urgent interest rate cut to protect Nigeria’s Industrial Base.

In a press release signed by Segun Ajayi-Kadi, Director General Manufacturers Association of Nigeria, MAN said it is deeply concerned and worried about the continued decision of the Central Bank of Nigeria (CBN) to maintain the Monetary Policy Rate (MPR) at 27.5 percent since November 2024, despite a global wave of interest rate reductions.

The statement reads:

The Manufacturers Association of Nigeria (MAN) is deeply concerned and worried about the continued decision of the Central Bank of Nigeria (CBN) to maintain the Monetary Policy Rate (MPR) at 27.5 percent since November 2024, despite a global wave of interest rate reductions aimed at revitalizing economic productivity and combating stagflation.

We are perturbed that when most progressive economies are charting a course toward industrial recovery and macroeconomic stability, Nigeria’s monetary stance tends to lead us in a different direction.

Over the last quarter, countries such as members of the Euro Area, the United Kingdom, Denmark, Australia, China, India, Thailand and Egypt, have implemented interest rate cuts to bolster economic growth and support productive sectors.

Yet, our rigidity continues to create unintended consequences that may deepen the parlous performance of the productive sector.

A nation cannot industrialize on the back of prohibitively expensive credit. With the benchmark interest rate held at 27.5 percent, Nigeria has become the 6th most expensive country to source credit as local manufacturers grapple with an average lending rate of over 37 percent.

This policy posture is not only inflationary, but is suffocating the capacity of the manufacturing sector.

Compounded by other limiting factors, our members—small, medium and even large-scale—are finding it increasingly difficult to stay afloat, expand production lines, or even meet basic operational costs.

When credit is priced highly, production declines and the nation “imports poverty”.

Our concerns go beyond the debilitating impact on our numbers business. The “Nigeria First Policy”, which seeks to strengthen local industry and reduce import dependence, may be under severe threat.

At the heart of its successful implementation lies access to affordable financing to boost capacity utilization.

Unfortunately, the current interest rate regime constrains finance costs for our members, surging by over 44 percent from ₦1.43 trillion in 2023 to ₦2.06 trillion in 2024 and rising. This represents a sharp increase that has directly depressed productivity and led to underutilization of industrial capacity.

The high cost of credit has not only diminished the flow of investments into the manufacturing sector but has also dulled the return on existing investments, with Small and Medium Industries hit the hardest.

Confidence in the industrial outlook has waned, as evident in the dip in the Manufacturers CEO’s Confidence Index from 50.7 points to 48.3 points.

This mirrors the growing anxiety of our manufacturers. A nation that woos foreign portfolio investors at the expense of its real sector may unwittingly be aspiring to build prosperity on the back of volatility.

We are disturbed by the implicit prioritization of short-term foreign capital inflows over the long-term health of domestic industries.

While maintaining a high interest rate of 27.5 percent may temporarily attract speculative foreign portfolio investors, it is doing so at the expense of Nigeria’s manufacturing base, which is now choked by unsustainable borrowing costs.

What is evident now is the widening profitability of the banking sector, buoyed by elevated interest margins, while manufacturers contend with shrinking margins, rising debts and declining productivity.

This is an economic paradox that must be urgently addressed. The current monetary policy trajectory risks turning banks into vaults of idle wealth, while the real economy—where jobs are created and value is added—faces suffocation. A society that rewards intermediaries over producers invites long-term decline.

Access to affordable credit is the oxygen that sustains industrial growth and no economy has ever grown by starving its manufacturers of oxygen. The Manufacturers Association of Nigeria is ever committed to collaborating with the Government and all stakeholders to achieve macroeconomic stability.

We therefore earnestly beseech the CBN to urgently reconsider its monetary stance. Moreover, recent disinflationary trends provide justification for the CBN to cut rates. Real interest rates have improved, already giving financial investors higher inflation-adjusted returns.

Therefore, maintaining a high nominal interest rate under current inflation conditions is neither necessary nor justifiable, and will only prolong the pain for manufacturers and consumers alike.In light of the above, MAN calls on the CBN to:

➢ Cut the benchmark interest rate significantly to reflect current realities and ease the credit burden on manufacturers.

➢ Deploy moral suasion and policy incentives for commercial banks to facilitate single-digit, concessionary interest rates to the manufacturing sector.

➢ Facilitate the approval of the ₦1 trillion earmarked for manufacturers under the Stabilization Plan to support industries struggling under current financial pressures.

➢ Facilitate significant increase in the capital base of the Bank of Industry (BOI) to scale up its capacity to meet the sector’s growing credit demands.

➢ Settle the outstanding $2.4 billion Forex Forward Contracts to restore manufacturers’ confidence and end the unprecedented decapitation of the financial viability of the affected industries. This will also improve access to non-locally available raw materials.

➢ Facilitate a policy direction to peg the customs duty exchange rate for importing industrial inputs, especially raw materials and machinery, to prevent further inflationary pass-through effect.

Industrial confidence is a fragile currency and once broken, it takes time to rebuild. Nigeria cannot afford to lose its manufacturing momentum at a time when the world is repositioning for the next wave of industrial transformation.

The commendable reform measures of this administration may not be helped by the persistent high cost and constrained access to funds. The current monetary policy is not only undermining manufacturers’ confidence but also jeopardizing national economic resilience.

We urge the Central Bank to act decisively and in synergy with the fiscal authority to ensure that Nigeria’s manufacturing sector does not sink deeper into stagnation. The time to act is now.

Related Topics:Featured Interest Rate Cut MAN

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Heirs Energies Secures $750 Million Financing from Afreximbank for Expansion

Published

2 days ago

December 21, 2025

Charles Flames

69 Views

Heirs Energies Limited, Nigeria’s leading indigenous integrated energy company, has secured a $750 million financing facility from the African Export-Import Bank (Afreximbank).

The deal was finalized during a signing ceremony in Abuja on December 20, 2025, attended by Tony O. Elumelu, CFR, Chairman of Heirs Energies, and Dr. George Elombi, President and Chairman of Afreximbank.

This transaction marks one of the largest financings ever obtained by an indigenous African energy firm, underscoring strong confidence in Heirs Energies’ operational track record, governance, brownfield expertise, and future growth potential.

Since taking over operatorship of Oil Mining Lease (OML) 17, Heirs Energies has implemented a rigorous turnaround strategy, emphasizing production recovery, asset integrity, and efficiency gains.

Through targeted interventions and infrastructure upgrades, the company has shifted from acquisition-focused funding to a sustainable capital structure suited to long-term reserve development.

Production has doubled since acquisition, rising from 25,000 barrels of oil per day (bopd) and 50 million standard cubic feet of gas per day (mmscf/d) to more than 50,000 bopd and 120 mmscf/d currently. All gas output is supplied to Nigeria’s domestic market, playing a key role in supporting national power generation.

The company has also overhauled community engagement and upheld top-tier health and safety standards.

The new Afreximbank facility will fund accelerated field development, production optimization, and strategic growth initiatives, all while adhering to strict capital discipline.Tony O. Elumelu, CFR, Chairman of Heirs Energies, commented: “This transaction is a powerful affirmation of what African enterprise can achieve when backed by disciplined execution and long-term African capital.

It reflects the successful journey Heirs Energies has taken—from turnaround to growth—and reinforces our belief in African capital working for African businesses. This is Africa financing Africa’s future.

”Dr. George Elombi, President and Chairman of Afreximbank, added: “Afreximbank is proud to support Heirs Energies at this pivotal stage of its growth.

This financing reflects our confidence in the company’s leadership, governance, and asset base, and aligns with our mandate to support African champions driving sustainable economic transformation across the continent.

”The deal highlights Afreximbank’s commitment to empowering indigenous operators capable of advancing energy security, sustainable development, and economic value throughout Africa.

With this funding in place, Heirs Energies is well-positioned for its next growth phase, prioritizing operational excellence, responsible resource management, and lasting stakeholder value.

Heirs Energies Limited is Africa’s leading indigenous-owned integrated energy company, dedicated to addressing the continent’s energy demands while advancing global sustainability objectives. It emphasizes innovation, environmental stewardship, and community development in the evolving energy sector.

The African Export-Import Bank (Afreximbank) is a Pan-African multilateral institution focused on financing and promoting intra- and extra-African trade, supporting industrialization, trade growth, and economic transformation.

Business

Dangote: A Dogged and Fierce Fighter for Local Industries Survival

Nigeria aims to reduce reliance on imported refined fuels by 2024/2025, transitioning to self- sufficiency through the Dangote Refinery and rehabilitated refineries in Port Harcourt, Warri, and Kaduna, with plans to become a net exporter.

Published

5 days ago

December 18, 2025

OCHEFA

98 Views

By OCHEFA

Africa’s billionaire Aliko Dangote, an astute industrialist, is always attentive to the environment around him, embodying the idiom” ears to the ground.

His investments in Nigeria and the other African countries span cement, sugar, petrochemicals, fertilisers and his latest venture, a $20 billion petroleum refinery in the Lekki free trade zone in Lagos.Six months ago, Dangote stepped down as the Chairman of the Dangote Group’s Board on July 25, 2025.

Anthony Chiejina, the Group’s Chief of Branding and Communications, explained that this move allows Dangote to focus more on the refinery, petrochemicals, Fertiliser, and government relations, to elevate the company’s five- year plan to new heights.

Subsequently, Emmanuel Ikazoboh, an independent non- executive director, was appointed Chairman of Dangote Cement Plc.

With his keen awareness of global and local oil and gas developments, Dangote closely monitors issues affecting his refinery’s operations.

He relies on a team of experts to keep him informed, and he responds fiercely against policies threatening his interests.

A current example is his public dispute with Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

With his keen awareness of global and local oil and gas developments, Dangote closely monitors issues affecting his refinery’s operations.

Recently, Dangote accused NMDPRA of economic sabotage, criticising its continued issuance of import licences for petroleum products- licenses totalling approximately 7. 5 billion litres of PMS for early 2026- despite Nigeria’s growing refining capacity.

He claimed this undermines local refining, sustains Nigeria’s dependence on fuel imports, and discourages local investments.

Dangote also alleged collusion between NMDPRA and international traders, which the regulator has denied.

Policies like a proposed 15% duty aim to make imports more expensive and accelerate this transition.

Dangote insists that he seeks accountability, not removal, calling for an investigation into NMDPRA’ s actions.

Following Dangote’s accusations,Ahmed resigned, acknowledging awareness of allegations against him and his family, which have attracted public attention.

He stated he avoided public disputes due to the sensitive nature of his regulatory role but welcomed a formal investigation to clear his name.

President Tinubu then asked the Senate to approve new CEOS for NMDPRA and NUPRC- Engineer Saidu Aliyu Mohammed and Oritsemeyiwa Amanorisewo Eyesan, respectively.

Business

President Tinubu to present 2026 budget to N/Assembly Friday

The 2026 budget is projected at N54.4 trillion, according to the approved 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

Published

5 days ago

December 18, 2025

OCHEFA

134 Views

President Bola Ahmed Tinubu will, on Friday, present the 2026 Appropriation Bill to a joint session of the National Assembly.

The presentation, scheduled for 2:00 pm, was conveyed in a notice issued by the Office of the Clerk to the National Assembly.

According to the notice, all accredited persons are required to be at their duty posts by 11:00 am on the day of the presentation, as access into the National Assembly Complex will be restricted thereafter for security reasons.

The notice, signed by the Secretary, Human Resources and Staff Development, Essien Eyo Essien, on behalf of the Clerk to the National Assembly, urged all concerned to ensure strict compliance with the arrangements ahead of the President’s budget presentation.

The 2026 budget is projected at N54.4 trillion, according to the approved 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).