The Manufacturers Association of Nigeria (MAN) has responded to the decisions reached at the 301st meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), held on July 21 and 22, 2025. The meeting was convened to assess recent economic and financial developments and their implications on the Nigerian economy.
The MPC noted that headline inflation declined to 22.22 percent in June 2025, from 22.97 percent in May 2025. However, food inflation rose to 21.97 percent in June, compared to 21.14 percent recorded in May. Despite this mixed trend, the Committee resolved to maintain the current monetary policy stance due to persisting uncertainties and inflationary risks.
Accordingly, the Monetary Policy Rate (MPR) was retained at 27.50 percent, with the asymmetric corridor at +500/-100 basis points, the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks, and the Liquidity Ratio at 30 percent.
Reacting to the MPC’s decision, the Manufacturers Association of Nigeria stated that, “The MPC decision reveals that the contractionary monetary stance is still maintained. The persistent increase in the rate over the years has impacted the sector negatively. 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.”
MAN further expressed concern over the consequences of the sustained high interest rate, noting that it has pushed borrowing costs to unsustainable levels. “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 Association stated.
The organisation highlighted the ripple effects on manufacturers’ operations, pointing out that, “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.”
Acknowledging the CBN’s efforts, the Association remarked, “The Manufacturers Association of Nigeria acknowledges the efforts of the Monetary Policy Committee to stabilise the monetary parameters with the view to address inflationary pressure.” However, MAN firmly believes that this approach alone is insufficient.
“Maintaining the current rate is not sufficient to address the inflationary pressure and to reposition the economy on the path of growth. It is necessary to consider a rate cut to reduce the cost of borrowing and attract investment in the real sector,” MAN said.
The association also emphasised the importance of government collaboration in reinforcing the real sector, stating 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 stabilisation policy.”
As part of its recommendations, MAN urged the Central Bank of Nigeria to consider revising its monetary stance: “CBN should 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.”
MAN also called for strategic policy interventions to strengthen domestic production. “We urge the commencement of implementation of a 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,” the association stated.
On food inflation and insecurity, MAN added, “It is important to intensify the ongoing efforts at tackling insecurity in farming communities to boost agricultural production and transport logistics, thereby reducing food inflation.”
It highlighted the need for broader economic reforms. “We recommend the introduction of measures that will improve redistribution of income, increase the welfare of the citizens and performance of the economy,” the statement concluded.
The Manufacturers Association of Nigeria reaffirms its commitment to working with stakeholders and policymakers to create a sustainable and competitive manufacturing environment, in line with Nigeria’s broader economic goals.
