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The Manufacturers Association of Nigeria (MAN) has raised concerns over a sharp decline in bank lending to the manufacturing sector, warning that soaring borrowing costs and limited access to credit are threatening industrial growth, investment and job creation
According to the association, bank credit to manufacturers fell by N1.92 trillion, dropping from N8.53 trillion in December 2024 to N6.61 trillion in December 2025. The 22.5 percent decline comes at a time when manufacturers are already battling high energy costs, exchange rate volatility and rising production expenses
In a statement released on Tuesday, MAN said the contraction in lending highlights the growing financial pressure facing the sector and could further weaken Nigeria’s industrialisation efforts
The association noted that although the Central Bank of Nigeria (CBN) recently reduced the Monetary Policy Rate (MPR) to 26.5 percent, manufacturers continue to face average prime lending rates of about 27 percent, while some commercial banks charge as much as 35.6 percent
MAN described the high cost of borrowing as one of the biggest barriers to industrial expansion, saying many manufacturers can no longer access the financing needed to invest in new equipment, expand production capacity or adopt modern technologies
“The primary barrier between manufacturers and financial bank liquidity is the exorbitant cost of borrowing,” the association stated
The group also pointed out that manufacturing experienced one of the largest declines in credit allocation among major sectors of the economy. While manufacturers received N6.61 trillion in bank credit, the oil and gas sector attracted N10.59 trillion, while the financial sector received N9.24 trillion
According to MAN, the figures suggest that commercial banks are increasingly directing funds to sectors that generate quicker returns, leaving productive industries with limited access to capital required for long-term growth
Beyond high lending rates, the association blamed the situation on restrictive monetary policies and the cautious lending approach adopted by commercial banks
MAN explained that the Cash Reserve Ratio (CRR), which remains between 45 and 50 percent for some banks, has significantly reduced the amount of funds available for lending. It added that many banks still consider manufacturers high-risk borrowers, making them reluctant to extend credit even under intervention programmes supported by the Federal Government and the CBN
The association also noted that manufacturers are often required to provide collateral and equity contributions that many businesses, particularly small and medium-sized manufacturers, cannot meet, effectively shutting them out of available financing opportunities
MAN further expressed disappointment over the delay in implementing the N1 trillion Manufacturing Stabilisation Fund announced under the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP)
According to the association, the fund was designed to help manufacturers manage the combined effects of naira depreciation, rising energy costs and high interest rates. However, nearly two years after the initiative was introduced, manufacturers are yet to benefit from the promised support
“The persistent non-implementation of the N1 trillion Manufacturing Stabilisation Fund remains an issue of promise not kept for the manufacturing sector,” the association stated
MAN warned that continued difficulty in accessing affordable credit could reduce factory capacity utilisation, discourage investment, slow business expansion and lead to job losses across the manufacturing industry
The association also cautioned that Nigeria’s industrialisation agenda and the implementation of the Nigeria Industrial Policy 2025 could be undermined if manufacturers continue to operate in an environment where borrowing costs remain above 30 percent
It added that the credit squeeze could worsen supply-side inflation by reducing local production and increasing dependence on imported goods, placing additional pressure on the country’s foreign exchange demand
Despite the decline in lending to manufacturers, data from the Central Bank shows that overall credit to Nigeria’s private sector continued to grow
Private sector credit rose to N81.04 trillion in May 2026 from N80.59 trillion recorded in April, despite the CBN maintaining a tight monetary policy stance to curb inflation. Net domestic credit also increased from N120.18 trillion to N121.42 trillion during the same period, while net other assets rose to N12.63 trillion from N11.88 trillion
The figures indicate that although lending activity remains resilient across the broader economy, manufacturers continue to struggle to access affordable financing. For MSMEs operating in the manufacturing sector, limited credit availability and high borrowing costs could slow business growth, reduce competitiveness and weaken their ability to create jobs and contribute to Nigeria’s economic development
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