MAN Raises Alarm as Manufacturing Credit Falls by N1.92tn, Warns of Threat to Industrial Growth

The Manufacturers Association of Nigeria (MAN) has expressed concern over the sharp decline in bank credit to the manufacturing sector, warning that the trend could derail Nigeria’s industrialisation agenda, worsen unemployment and undermine the implementation of the Nigeria Industrial Policy (NIP) 2025.

In a statement issued on Thursday, MAN Director-General, Segun Ajayi-Kadir, revealed that credit to manufacturers contracted by 22.5 per cent, representing a decline of approximately N1.92 trillion.

According to him, the development poses a significant threat to the growth and competitiveness of the sector, which remains a key driver of economic development and job creation.

“The Nigerian manufacturing sector cannot thrive without sustainable and growing financial foundations. Reduced access to credit limits expansion, innovation and competitiveness,” Ajayi-Kadir said.

The association identified high borrowing costs as the primary challenge preventing manufacturers from accessing available bank funds. MAN noted that as of May 2026, average prime lending rates hovered around 27 per cent, while maximum lending rates climbed to 35.6 per cent, making long-term industrial investments increasingly difficult.

MAN also blamed the situation on the Central Bank of Nigeria’s stringent Cash Reserve Ratio (CRR), estimated at between 45 and 50 per cent for commercial banks, which it said significantly reduces the volume of funds available for lending.

The association further decried the non-implementation of the proposed N1 trillion Manufacturing Stabilisation Fund, despite its inclusion in the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP) since 2024.

According to MAN, the suspension of new applications under the Central Bank’s development finance programmes, including the Real Sector Support Fund (RSSF), has compounded the challenges facing manufacturers.

“The withdrawal of these interventions has forced manufacturers into the commercial lending market, where interest rates exceeding 35 per cent make productive borrowing almost impossible,” Ajayi-Kadir stated.

The association warned that continued contraction in manufacturing credit could weaken capacity utilisation, reduce the sector’s contribution to Gross Domestic Product (GDP), trigger job losses and fuel inflation through lower domestic production.

MAN also cautioned that declining local manufacturing output could increase dependence on imports, place additional pressure on foreign exchange reserves and slow Nigeria’s economic diversification efforts.

The group argued that the challenge lies not in the availability of capital within the economy but in the structure of development financing, which it said relies heavily on conventional commercial banking channels focused on short-term profitability and strict collateral requirements.

To address the problem, MAN called for a comprehensive overhaul of Nigeria’s industrial financing framework, urging policymakers to create financing mechanisms specifically tailored to support long-term industrial development.

The association maintained that without urgent reforms to improve access to affordable credit, Nigeria risks stalling its industrialisation drive and limiting the expected impact of the Nigeria Industrial Policy 2025.