The Manufacturers Association of Nigeria (MAN) has welcomed the Central Bank of Nigeria’s (CBN) decision to cut the Monetary Policy Rate (MPR) by 350 basis points, describing the move as a positive step towards creating a more supportive financing environment for businesses.
The CBN’s Monetary Policy Committee (MPC), at its 307th meeting held on September 21 and 22, 2026, reduced the MPR from 26.5 per cent to 23 per cent.
The committee also adjusted the Standing Facilities Corridor to +50/-300 basis points around the MPR, while retaining the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks and 16 per cent for Merchant Banks. The Liquidity Ratio was retained at 30 per cent.
In a statement signed by its Director-General, Segun Ajayi-Kadir, MAN said the 350-basis-point reduction represented a significant easing of monetary policy after a prolonged period of tight financial conditions.
According to the association, the rate cut could lower borrowing costs and improve manufacturers’ ability to finance inventory, raw materials, production cycles, equipment acquisition and business expansion.
MAN said the decision was in line with its expectation that monetary easing should follow a period of macroeconomic stabilisation, adding that the move could help reverse some of the pressures that have constrained manufacturing performance.
The association, however, expressed concern over the retention of the 45 per cent CRR for Deposit Money Banks, arguing that the requirement could continue to limit the volume of funds available for lending to productive sectors.
“While reserve requirements remain important for financial and monetary stability, the relatively high CRR may continue to constrain the proportion of deposits available for lending to productive sectors,” MAN said.
It added that the benefits of the MPR reduction might not be fully realised if increased liquidity did not translate into greater credit access for the real sector.
MAN also noted that the rate cut was likely to result in lower yields on short-term government securities, including Treasury Bills and Open Market Operations instruments, while reducing the Federal Government’s debt-servicing and borrowing costs.
However, the association stressed that the extent to which manufacturers benefit from the rate cut would depend on the speed and effectiveness of monetary policy transmission to actual lending rates.
It also called for complementary fiscal and structural measures to address electricity costs, logistics expenses, infrastructure deficits, insecurity and other constraints driving up production costs.
According to MAN, further reductions in interest rates would be required to achieve a more meaningful impact on the manufacturing sector, although it acknowledged that monetary easing alone could not resolve the industry’s structural challenges.
The association consequently called for stronger coordination between monetary and fiscal authorities to ensure that the rate cut translates into lower lending costs, improved access to credit, increased investment and stronger industrial growth.
Among other measures, MAN urged the government to expand access to concessionary, single-digit financing for manufacturers, particularly small and medium-sized industrial enterprises and businesses in strategic sectors.
It also called for a progressive review of the CRR when macroeconomic conditions permit, stronger collaboration with banks to ensure that the MPR reduction translates into lower commercial lending rates, and intensified efforts to reduce energy, transport and logistics costs.
The association further advocated greater domestic gas utilisation, improved electricity supply and incentives for alternative and renewable energy solutions for industrial users.
MAN called for accelerated implementation of the Nigeria First Policy to strengthen domestic value chains, promote local sourcing of raw materials and reduce dependence on imports.
It also urged the government to fully implement the recent Memorandum of Understanding between the Ministry of Finance and the CBN, saying the agreement should deliver measurable improvements in policy coordination, investor confidence and the predictability of the business environment.
On foreign exchange, MAN proposed the creation of a dedicated and transparent FX window for legitimate manufacturers seeking to import capital equipment and essential raw materials that are unavailable locally.
The association also called for the strengthening of NIRSAL and other credit guarantee schemes to cover industrial SME risks, as well as the reactivation of low-interest intervention programmes through the Bank of Industry and Development Bank of Nigeria.
MAN further urged the government to operationalise the proposed N1 trillion Manufacturing Stabilisation Fund at a nine per cent interest rate through the Bank of Industry, with transparent eligibility criteria and timely disbursement.
It also proposed development financing for manufacturing SMEs at five per cent interest, with repayment structures aligned with the production and investment cycles of the businesses.
The association called for future MPC meetings to place greater emphasis on assessing the impact of monetary policy decisions on the manufacturing and productive sectors.
“MAN appreciates the MPC’s latest move towards a less restrictive monetary policy environment and encourages continued policy calibration that balances macroeconomic stability with the urgent need to stimulate productive investment, industrialisation, employment generation and sustainable economic growth,” the association said.
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