The Manufacturers Association of Nigeria (MAN) has raised alarm over a sharp decline in bank credit to the manufacturing sector, warning that the trend could undermine industrial growth, job creation, and the country’s economic diversification agenda.
In a statement issued in Lagos on June 23, 2026, MAN Director-General, Segun Ajayi-Kadir, disclosed that commercial bank lending to manufacturers dropped by ₦1.92 trillion, falling from ₦8.53 trillion in December 2024 to ₦6.61 trillion in December 2025, representing a 22.5 per cent year-on-year contraction.
According to MAN, the decline places the manufacturing sector far behind the oil and gas industry, which attracted ₦10.59 trillion in credit, and the financial sector, which received ₦9.24 trillion, reflecting what the association described as a growing preference for speculative activities over productive investments.
The association noted that while countries such as India and Vietnam expanded industrial credit in 2025 to support manufacturing growth, Nigeria’s shrinking access to finance threatens capacity utilisation, technological advancement, and employment generation.
MAN identified several factors responsible for the decline in credit to manufacturers, including high lending rates, stringent monetary policies, risk aversion among commercial banks, and delays in implementing government-backed intervention programmes.
It stated that despite the Central Bank of Nigeria’s reduction of the Monetary Policy Rate (MPR) to 26.5 per cent, borrowing costs remain prohibitive, with average prime lending rates standing at 27 per cent and maximum rates reaching 35.6 per cent in major banks.
The association also blamed the high Cash Reserve Ratio (CRR), estimated at between 45 and 50 per cent, for limiting banks’ lending capacity. It further argued that commercial banks’ cautious lending practices have restricted access to intervention funds intended for manufacturers, as many firms struggle to meet collateral and equity requirements.
MAN expressed concern over the continued delay in implementing the proposed ₦1 trillion Manufacturing Stabilisation Fund, which was announced under the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP) in 2024.
According to the association, the non-disbursement of the fund has left manufacturers grappling with the combined effects of high energy costs, currency depreciation, and expensive borrowing conditions.
The group also linked the contraction in manufacturing credit to the Central Bank’s decision to halt direct development finance interventions, including support through the Real Sector Support Fund (RSSF). It argued that the move has forced manufacturers to rely on commercial loans with interest rates exceeding 35 per cent, thereby reducing access to affordable capital.
MAN warned that the credit squeeze could suppress manufacturing capacity utilisation, limit investment in technology and expansion, and weaken the sector’s contribution to Gross Domestic Product (GDP), which currently stands at about 9.57 per cent.
The association further cautioned that inadequate financing could lead to factory closures, job losses, increased dependence on imports, rising inflationary pressures, and greater strain on the country’s foreign exchange reserves.
It also warned that the persistent shortage of affordable credit could undermine the successful implementation of the 2025 Nigeria Industrial Policy (NIP), which aims to boost industrial productivity, competitiveness, and employment through targeted financing initiatives.
To address the situation, MAN called on the government and monetary authorities to reduce benchmark interest rates by an additional 200 to 300 basis points, lower the CRR for banks that support manufacturers with single-digit loans, and strengthen the capital base of the Bank of Industry (BOI).
The association also urged the expansion of BOI intervention funds to enable manufacturers refinance high-interest loans at rates between seven and nine per cent over a minimum period of 10 years.
Other recommendations include the introduction of a 50 per cent government-backed guarantee scheme for loans granted to small and medium-scale manufacturers, immediate release of the ₦1 trillion Manufacturing Stabilisation Fund, and the transfer of its management to the Bank of Industry with a nine per cent interest rate cap and a seven-day processing timeline.
Ajayi-Kadir maintained that Nigeria’s manufacturing challenges are rooted not in a lack of capital but in ineffective policy implementation and financing structures that fail to channel affordable funds to productive sectors.
He called on the government to establish transparent and independent financing mechanisms capable of delivering single-digit credit directly to manufacturers and urged authorities to conduct an urgent audit of the sector to assess the impact of recent economic reforms.
He stressed that unless policy commitments are matched with accessible financing, Nigeria’s ambition of becoming a globally competitive manufacturing hub will remain difficult to achieve.
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