The Manufacturers Association of Nigeria (MAN) has expressed deep concern over what it described as a severe financing crisis in the country’s industrial sector following a sharp decline in commercial bank lending to manufacturers.
According to the association, credit allocation to the manufacturing sector dropped by ₦1.92 trillion, from ₦8.53 trillion in December 2024 to ₦6.61 trillion in December 2025, representing a 22.5 per cent year-on-year contraction.
In a position paper released recently in Lagos, MAN warned that the decline in access to finance threatens industrial growth, job creation, capacity expansion, and Nigeria’s broader economic diversification agenda.
“The Nigerian manufacturing sector cannot thrive without sustainable and growing financial foundations. The reduction in credit access could further limit capacity utilisation, stall technological upgrades and hinder job creation’’, the association stated.
The association said that manufacturing recorded one of the largest declines in bank credit among major sectors of the economy, trailing only the General Services sector. It lamented that the sector now lags significantly behind the oil and gas industry, which attracted ₦10.59 trillion in credit, and the finance sector, which received ₦9.24 trillion.
MAN argued that the trend reflects a growing preference for speculative and rent-seeking activities over productive investments.
Drawing comparisons with other emerging economies, the association said India’s industrial credit expanded by 9.6 per cent in 2025, while Vietnam targeted between 19 and 20 per cent credit growth to support manufacturing development.
The association attributed the worsening credit crunch to high lending rates, stringent banking requirements, policy inconsistencies, and the non-implementation of key government support programmes.
It noted that despite the Central Bank of Nigeria’s recent adjustment of the Monetary Policy Rate to 26.5 per cent, manufacturers still face average prime lending rates of 27 per cent and maximum lending rates of 35.6 per cent.
MAN said that, “The primary barrier between manufacturers and financial bank liquidity is the exorbitant cost of borrowing,” adding that the current interest rate environment makes long-term industrial investment financially unsustainable.
The association also criticised the continued maintenance of high Cash Reserve Ratio requirements for banks and what it described as excessive risk aversion among commercial lenders.
According to MAN, manufacturers seeking intervention funds are often confronted with collateral requirements and equity contributions that many firms cannot meet.
“While the funds exist to help struggling manufacturers, they can only be accessed by large companies that are already highly liquid and secure,” MAN said.
The association further expressed disappointment over the delayed implementation of the proposed ₦1 trillion Manufacturing Stabilisation Fund, which was announced under the government’s Accelerated Stabilisation and Advancement Plan (ASAP) in 2024.
“For two years, we have awaited this fund to ameliorate the credit crunch in the sector and cushion the impact of currency devaluation and astronomical energy costs. There appears to be no visible effort at delivering on that score,’’ the association mentioned.
The group also linked the decline in manufacturing credit to the Central Bank’s decision to halt direct development finance interventions, including support windows such as the Real Sector Support Fund.
It warned that the policy shift has pushed manufacturers into the commercial lending market, where borrowing costs often exceed 35 per cent.
MAN cautioned that the continued credit squeeze could suppress industrial capacity utilisation, worsen unemployment, intensify inflationary pressures, and undermine the implementation of the 2025 Nigeria Industrial Policy.
“A visionary industrial policy without a functioning credit transmission mechanism will amount to a well-drafted but comatose aspirational policy, it is practically impossible to kickstart a manufacturing revolution without actively financing the factories tasked with building it,’’ said MAN
MAN Director-General, Segun Ajayi-Kadir, urged policymakers to align financial sector policies with the country’s industrialisation goals.
“The persistent financial starvation of Nigerian manufacturing stems not from an absolute scarcity of national capital, but from a fundamental breakdown in policy alignment and distribution architecture,” Ajayi-Kadir said.
He added that unless government policies are translated into accessible and affordable financing for manufacturers, Nigeria’s ambition of becoming a globally competitive manufacturing hub would remain out of reach.
“Until policy promises are structurally insulated from hostile commercial loan criteria and translated into accessible capital, Nigeria’s ambition to transform into a competitive manufacturing powerhouse will remain permanently stalled,” he said.
