Manufacturers are getting crushed by insane interest rates while begging for cheaper loans. The average lending rate sits at thirty-six point six percent, described as restrictive and choking the sector. This has cut credit access to the manufacturing industry by over eight hundred billion naira in a short period. The high cost of borrowing hinders production and reduces competitiveness against foreign goods.
The Manufacturers Association of Nigeria called for deeper interest rate cuts from the central bank. They stated that growth cannot thrive where capital remains prohibitively expensive. While acknowledging a recent small rate reduction, manufacturers insist that bolder action is needed. They want a policy that meaningfully lowers credit costs to stimulate real investment.
High rates have contributed to a drop in overall private sector credit. Persistent expensive loans limit access for small and medium industries, especially. The situation is compounded by structural problems like poor infrastructure and high logistics costs. Inadequate electricity supply and insecurity further raise production expenses.
The association proposed a specialized refinancing facility for manufacturing loans at single-digit rates. They also want a public dashboard tracking lending flows and sectoral disbursement patterns. Manufacturers advocate for a stabilization fund and increased capital for the Bank of Industry. Their long-term goal includes establishing a dedicated manufacturer's bank for concessionary credit.
Analysts project that tight credit conditions may continue into next year. Both supply and demand-side constraints could limit private sector borrowing. This outlook places additional pressure on policymakers to intervene. The manufacturing sector seeks urgent relief to prevent further contraction and job losses.
The Manufacturers Association of Nigeria called for deeper interest rate cuts from the central bank. They stated that growth cannot thrive where capital remains prohibitively expensive. While acknowledging a recent small rate reduction, manufacturers insist that bolder action is needed. They want a policy that meaningfully lowers credit costs to stimulate real investment.
High rates have contributed to a drop in overall private sector credit. Persistent expensive loans limit access for small and medium industries, especially. The situation is compounded by structural problems like poor infrastructure and high logistics costs. Inadequate electricity supply and insecurity further raise production expenses.
The association proposed a specialized refinancing facility for manufacturing loans at single-digit rates. They also want a public dashboard tracking lending flows and sectoral disbursement patterns. Manufacturers advocate for a stabilization fund and increased capital for the Bank of Industry. Their long-term goal includes establishing a dedicated manufacturer's bank for concessionary credit.
Analysts project that tight credit conditions may continue into next year. Both supply and demand-side constraints could limit private sector borrowing. This outlook places additional pressure on policymakers to intervene. The manufacturing sector seeks urgent relief to prevent further contraction and job losses.
