Nigerian manufacturers urge CBN to cut interest rate to ease inflation, boost growth in real sector

The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN) to reconsider its monetary policy posture and implement a rate cut to ease inflation and boost growth in the real sector, especially manufacturing and agriculture.

This call is coming on the heels of the recent decision of the CBN’s Monetary Policy Committee (MPC), which at its 301st meeting held on July 21 and 22, 2025, resolved to retain the Monetary Policy Rate (MPR) at 27.5%.

In a position statement issued by the DG MAN, Ajayi Segun-Kadir, the Association acknowledged the committee’s efforts to stabilize key monetary indicators, but argued that maintaining the current high rate is not sufficient to tackle inflation or stimulate productive investment.

According to the association, the persistent contractionary stance of the CBN has significantly strained manufacturers, adding that the expectation of MAN is to have a rate cut that is supported by a robust fiscal policy framework capable of facilitating improved access to long term loans, enhanced productivity and sustained economic growth.

​“The same 27.50 percent MPR rate adopted months ago surged the cost of borrowing, as the average lending rate to manufacturers stood at more than 35% as at January 2025. The rate also had trickle down effects on production cost, impacting prices of finished products, capacity utilization, inventory of unsold goods and competitiveness negatively. In 2024 alone, capacity utilization stood at 57 percent, inventory of unsold goods rose to N2,140 billion from N1,141.33 billion recorded in 2023. These impact points combined to create uncertainty, disrupt production and investment plans,” DG MAN stressed.

​The Manufacturers Association of Nigeria acknowledges the efforts of the Monetary Policy Committee to stabilize the monetary parameters with the view to address inflationary pressure.

The Association maintained that the current rate is not sufficient to address the inflationary pressure and to reposition the economy on the path of growth, hence it is necessary to consider a rate cut to reduce the cost of borrowing and attract investment in the real sector.

​ Additionally, MAN noted that it is critical that the Government consider the need to support the development of the real sector of the economy, especially the manufacturing and Agricultural sectors, to aid the effectiveness of stabilization policy.

The Association, therefore recommended as follows: “CBN to consider reduction of interest rate subsequently to reduce inflation and synergies with the fiscal authority to provide supportive measures that will reposition the manufacturing sector.

“Commence implementation of Nigeria First Policy to boost local patronage and provide incentives for investment in backward integration and local sourcing of raw materials. This will reduce the pressure on the dollar to the barest minimum.

“Intensify the ongoing efforts at tackling insecurity in farming communities to boost agricultural production and transport logistics, thereby reducing food inflation.

“Introduce measures that will improve redistribution of income, increase the welfare of the citizens and performance of the economy.”