The Manufacturers Association of Nigeria (MAN) has urged urgent policy reforms after commercial bank credit to the manufacturing sector fell by 22.5 per cent between December 2024 and December 2025, the group said on Tuesday.
The MAN called for urgent reforms to reverse a 22.5 per cent contraction in bank credit to the sector, including reducing the Monetary Policy Rate (MPR), lowering the CRR for banks and operationalising the N1 trillion Manufacturing Stabilisation Fund.
MAN said credit to the sector contracted by N1.92 trillion, falling from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
The association described the decline as “deeply concerning,” noting that manufacturing recorded one of the largest credit contractions among major sectors, exceeded only by general services.
MAN warned that the slump has left manufacturing trailing behind the extractive Oil & Gas industry and the finance sector, with the association saying banks are showing a systemic preference for speculative and rent-seeking activities over productive investments in industry.
The association’s director-general, Segun Ajayi-Kadir, told reporters that the primary challenge facing manufacturers is the high cost of borrowing. He said that although the Central Bank of Nigeria (CBN) has adjusted the Monetary Policy Rate (MPR) to encourage disinflation, commercial lending rates remained elevated and were making long-term investments in manufacturing unviable.
Ajayi-Kadir said the average prime lending rate as of May 2026 was about 27 per cent, and called for comprehensive measures to reduce borrowing costs, including closer collaboration between the CBN and commercial banks.
He argued that the CBN’s strict Cash Reserve Ratio (CRR) was limiting liquidity available for lending and forcing banks to adopt a cautious stance.
He said manufacturers often face stringent criteria to access funds and called for a reevaluation of collateral and risk management practices to encourage more supportive lending to industry.
MAN urged the CBN to consider reducing the MPR and for regulators to lower the CRR for banks to free up liquidity for productive lending. The association also called for the activation of the long-promised N1 trillion Manufacturing Stabilisation Fund, which it said was critical to easing financial pressure on manufacturers.
Ajayi-Kadir said the N1 trillion fund had been included in the Accelerated Stabilisation and Advancement Plan (ASAP) since 2024 but had not yet been operationalised. He warned that timely disbursement would provide a vital lifeline for manufacturers struggling with high interest rates and rising operational costs.
The MAN director-general also faulted the CBN’s decision to halt direct development finance interventions. He said the bank’s discontinuation of programs such as the Real Sector Support Fund (RSSF) had “significantly impacted” the sector and left manufacturers in a more challenging lending environment.
He called for a review of that policy and for the reintroduction of targeted development finance programs that would restore access to affordable capital for manufacturers, enabling them to expand production and create jobs.
MAN pointed to international examples to show alternative approaches, saying that India recorded a 9.6 per cent year-on-year growth in bank credit to industry after pushing for a 15 per cent expansion, while Vietnam had set credit growth targets of 19–20 per cent to boost its manufacturing sector.
The association listed key reforms it wants implemented: a cut in the MPR, a lower CRR to increase bank liquidity, operationalisation of the N1 trillion Manufacturing Stabilisation Fund, a rethink of banks’ risk-appetite and collateral requirements, and renewed development finance support.
Ajayi-Kadir said that, if adopted, those measures would help reverse the credit contraction and create a more supportive environment for Nigeria’s manufacturers.
He urged prompt action from the CBN, commercial banks and fiscal authorities to prevent further erosion of the sector.
