By Kayode Olopade
The Manufacturers Association of Nigeria (MAN) has raised concerns over the sharp decline in credit available to the manufacturing sector, warning that the contraction threatens industrial expansion, job creation and Nigeria’s economic diversification agenda.
According to MAN, commercial bank credit to manufacturers declined by ₦1.92 trillion between December 2024 and December 2025, dropping from ₦8.53 trillion to ₦6.61 trillion. The figure represents a year-on-year contraction of 22.5 per cent, placing manufacturing among the sectors with the highest decline in credit access.
The association said the development was troubling at a time when Nigeria requires increased investment in productive sectors to strengthen local production, reduce import dependence and create employment opportunities.
MAN noted that while manufacturing credit suffered a major decline, other sectors such as oil and gas and financial services continued to attract higher levels of bank financing, raising concerns about the allocation of capital towards productive activities.
In its assessment, the association blamed the worsening situation on a combination of high borrowing costs, restrictive monetary conditions, commercial banks’ risk-averse lending approach and delays in implementing targeted industrial support programmes.
The manufacturers highlighted high interest rates as one of the biggest obstacles confronting businesses, noting that borrowing costs remain too expensive for long-term investments in factories, machinery upgrades and production expansion.
MAN stated that with lending rates reportedly above 30 per cent in many cases, manufacturers are finding it increasingly difficult to finance operations, maintain competitiveness and expand capacity.
The association also identified the high Cash Reserve Requirement (CRR) maintained by the Central Bank of Nigeria as another factor limiting the amount of funds available for lending to businesses.
According to MAN, commercial banks have become more cautious in extending credit because they bear the risks associated with intervention funds, thereby making many manufacturers unable to meet collateral and equity requirements demanded by lenders.
The group further expressed concern over the delay in implementing the proposed ₦1 trillion Manufacturing Stabilisation Fund, describing the situation as a major setback for companies struggling with rising production costs, currency pressures and energy challenges.
MAN warned that the decline in manufacturing financing could negatively affect factory operations, limit technology upgrades, reduce capacity utilisation and worsen unemployment as businesses are forced to scale down production.
The association also cautioned that weakening domestic production could deepen inflationary pressures by increasing dependence on imported goods and putting additional pressure on foreign exchange reserves.
To reverse the trend, MAN called for urgent measures including further reduction in interest rates, incentives for banks that provide affordable credit to manufacturers, stronger funding for the Bank of Industry and the introduction of government-backed credit guarantees for small and medium-scale manufacturers.
The association also urged the government to ensure the immediate implementation of the Manufacturing Stabilisation Fund and create a more direct financing structure capable of delivering single-digit interest loans to genuine manufacturers.
MAN Director-General, Segun Ajayi-Kadir, said Nigeria’s industrial ambitions could only be achieved when manufacturers have access to affordable and sustainable financing.
He warned that without a functional credit system supporting production, Nigeria’s goal of becoming a competitive manufacturing economy would remain difficult to achieve.
Manufacturers Association of Nigeria says declining access to affordable finance is threatening factory expansion, employment and economic diversification, urging government and regulators to urgently reform industrial financing.
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