The Manufacturers Association of Nigeria (MAN) has reacted to the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) decision to maintain the Monetary Policy Rate (MPR) at 27.50 percent.
In a statement, MAN expressed disappointment with the decision, noting that the high interest rate has negatively impacted the manufacturing sector.
MAN pointed out that the persistent increase in the MPR rate over the years has led to a surge in the cost of borrowing, with the average lending rate to manufacturers standing at over 35 percent as of January 2025.
This has had a trickle-down effect on production costs, prices of finished products, capacity utilization, and competitiveness.
The association noted that capacity utilization stood at 57 percent in 2024, while the inventory of unsold goods rose to N2,140 billion from N1,141.33 billion recorded in 2023.
These indicators, MAN said, have combined to create uncertainty, disrupt production, and investment plans.
MAN is recommending that the CBN consider reducing the interest rate to reduce the cost of borrowing and attract investment in the real sector.
The association also called for the implementation of the Nigeria First Policy to boost local patronage and provide incentives for investment in backward integration and local sourcing of raw materials.
Other recommendations of the association include:
– Intensification of efforts at tackling insecurity in farming communities to boost agricultural production and transport logistics, thereby reducing food inflation.
– Introduction of measures to improve redistribution of income, increase the welfare of citizens, and enhance economic performance.
MAN acknowledged the efforts of the MPC to stabilize monetary parameters but emphasized the need for a rate cut to reposition the economy on the path of growth.
The association believes that a supportive fiscal policy framework and synergies between the CBN and the fiscal authority are necessary to facilitate improved access to long-term loans, enhance productivity, and sustain economic growth.
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