CBN Rate Cut: Manufacturers Demand Cheaper Loans, ₦1tn Fund

……….Seek lower CRR, single-digit interest rates, dedicated FX window

The Manufacturers Association of Nigeria has welcomed the Central Bank of Nigeria’s 350-basis-point cut in its benchmark interest rate but warned that the move will have limited impact on the real sector unless commercial banks begin to lend to manufacturers at significantly lower rates.

MAN also renewed its demand for a review of the 45 per cent Cash Reserve Ratio for Deposit Money Banks, saying the high requirement continues to restrict the pool of funds available for lending to productive businesses.

The association’s position followed the decision of the CBN’s Monetary Policy Committee to slash the Monetary Policy Rate from 26.5 per cent to 23 per cent at its 307th meeting held on September 21 and 22, 2026.

In a statement signed by its Director-General, Segun Ajayi-Kadir, MAN described the 350-basis-point reduction as a significant easing of monetary policy after a prolonged period of tight financial conditions.

The manufacturers said the lower MPR could reduce borrowing costs and improve access to funds for raw materials, inventory, production, equipment acquisition and business expansion.

But the association warned that the expected benefits could be lost if the reduction failed to transmit to actual commercial lending rates.

MAN said the retention of the 45 per cent CRR could continue to constrain banks’ capacity to channel deposits into productive sectors.

It therefore called for stronger coordination between the CBN, Federal Government and commercial banks to ensure that the latest monetary policy decision results in cheaper credit, increased investment and higher industrial output.

The association demanded the expansion of concessionary, single-digit financing for manufacturers, particularly small and medium-sized industrial enterprises and businesses operating in strategic sectors.

It also urged the government to operationalise the proposed ₦1tn Manufacturing Stabilisation Fund at nine per cent interest through the Bank of Industry, with transparent eligibility requirements and prompt disbursement.

MAN further proposed five per cent development financing for manufacturing SMEs, with repayment schedules structured around their production and investment cycles.

On foreign exchange, the manufacturers called for a dedicated and transparent FX window for legitimate industrial operators importing capital equipment and essential raw materials unavailable locally.

The association also urged the strengthening of NIRSAL and other credit guarantee schemes to reduce lending risks to industrial SMEs and called for the revival of low-interest intervention programmes through the Bank of Industry and Development Bank of Nigeria.

Beyond interest rates, MAN identified electricity, energy, transportation, logistics, infrastructure and insecurity as major cost pressures confronting manufacturers.

It called for improved electricity supply, greater domestic gas utilisation and incentives for alternative and renewable energy solutions to reduce the cost of industrial production.

MAN also urged the Federal Government to accelerate implementation of the Nigeria First Policy to strengthen domestic value chains, promote local sourcing of raw materials and reduce dependence on imports.

The association called for full implementation of the recent Memorandum of Understanding between the Ministry of Finance and the CBN, arguing that stronger policy coordination would improve investor confidence and make the business environment more predictable.

While acknowledging the CBN’s move towards a less restrictive monetary policy environment, MAN stressed that monetary easing alone would not resolve the structural problems confronting Nigerian manufacturers.

It urged the MPC to give greater consideration to the impact of future monetary policy decisions on manufacturing and other productive sectors, insisting that lower interest rates must ultimately translate into increased access to credit, investment, industrialisation and job creation.