The Manufacturers Association of Nigeria (MAN) said the current borrowing cost, ranging from 30 to 37 per cent, is unbearably high for manufacturers and hindering production and competitiveness.

Reacting to the apex bank’s decision to maintain the monetary policy rate (MPR) at 27 per cent at its last meeting on Monday, the association’s Director-General, Segun Ajayi-Kadir, noted that it was unfavourable to manufacturers, adding that the cost of credit remained one of the biggest constraints.

He said he expected a reduction in the rate to reduce the cost of borrowing for manufacturers.The DG noted that while the Central Bank emphasised exchange rate stability and improved forex liquidity, it is essential to reduce the cost of funds to encourage borrowing for expansion and investment.

He said persistent high lending rates would limit access to affordable credit for manufacturers, especially those within the SMI cadre.
He further noted that the situation is complicated with prevailing structural challenges like poor infrastructure, high logistics costs, inadequate electricity supply, high energy costs and insecurity that cumulatively raise production costs and weaken competitiveness.

He urged policymakers to, instead of alienating them, pursue policies that foster inclusive growth, incentivise manufacturing and address binding constraints limiting the sector’s performance.

“The CBN should also strengthen its handshake with the fiscal authority to promote reforms capable of unlocking the full potential of the manufacturing sector,” he said.