Manufacturers seek single-digit loans, sustained economic reforms

Local manufacturers under the aegis of the Manufacturers Association of Nigeria (MAN) have called on the Federal Government to establish a manufacturing refinancing facility that would enable factories to access loans at single-digit interest rates as part of measures to revitalise the sector this year.

MAN’s Director General, Segun Ajayi-Kadir, appealed while outlining the association’s expectations for the year, proposing that commercial banks should provide credit to manufacturers at rates below 10 per cent with repayment periods extending to seven years.

Speaking on the state of the sector, Ajayi-Kadir noted that the foreign exchange (FX) rate remained stable, with the Central Bank of Nigeria (CBN) holding benchmark rates steady and manufacturing capacity utilisation maintaining consistent levels.

However, he acknowledged that significant challenges persist. He said insecurity, particularly in the northeast and north central regions, has completely disrupted logistics.

He noted that rising electricity costs remain a concern despite some relief from reduced diesel and petrol prices following the commencement of operations at the Dangote refinery.

The new tax regime, he said, seeks to reduce taxes payable by manufacturers from 63 to about 10. He described the move as commendable. He expressed hope that small and medium-scale industries would benefit significantly, with the smallest enterprises exempted from withholding tax, VAT and company income tax.

On specific interventions needed, he emphasised the urgency of implementing the Nigerian content policy announced by President Tinubu last year and called on ministries, departments and agencies (MDAs) to patronise locally-manufactured products.

He also pushed for further interest rate cuts by the Central Bank, arguing that borrowing at 35 to 36 per cent stifles manufacturing growth.

Ajayi-Kadir stressed the need to keep inflation in check and the exchange rate below N1,400/$1 to reduce input costs.

Addressing concerns about 2026 being a pre-election year, Ajayi-Kadir urged the government to maintain focus on economic reforms despite political pressures. He warned that the administration cannot afford to sacrifice economic progress for political expediency, particularly after implementing difficult reforms that caused significant disruption.

“A lot of reforms have settled down, the growth prospects are there, the economic indicators are looking right or can be made right quickly,” he said, adding that sustained focus on the economy would be in the enlightened political interest of the president.