MAN raises alarm over N1.92tn credit loss, faults FG over unfulfilled promise
Manufacturers Association of Nigeria (MAN) has strongly criticized Federal Government over a staggering 22.5 percent contraction in credit to the manufacturing sector, pointing to unfulfilled policy promises and an oppressive high-interest-rate environment. Recent data from Central Bank of Nigeria (CBN) reveals that commercial bank credit to manufacturers plummeted by N1.92 trillion, dropping from N8.53 trillion in December 2024 to N6.61 trillion by December 2025. This sharp decline has left the vital industrial sector trailing far behind other major areas of the economy, such as oil and gas, which secured N10.59 trillion in credit, and the finance sector at N9.24 trillion.
MAN Director-General Segun Ajayi-Kadir described the development as deeply disturbing, marking it as one of the steepest credit contractions among the economy’s top sectors. He squarely blamed the credit crunch on risk-averse lending practices by commercial banks, structural bureaucracy, and the government’s ongoing failure to implement the N1 trillion Manufacturing Stabilisation Fund. Despite its prominent inclusion in the government’s Accelerated Stabilisation and Advancement Plan since 2024, the promised fund has failed to materialize. For two years, domestic manufacturers have been left waiting for this crucial fiscal cushion to help them navigate the twin shocks of currency devaluation and astronomical energy costs.
This prolonged delay has forced genuine manufacturers to fight for survival in a high-interest-rate environment without any government safety net. As of May 2026, the financial barrier remains exceptionally high, with prime lending rates averaging 27 percent and maximum lending rates hitting a prohibitive 35.6 percent. According to MAN, these exorbitant borrowing costs make long-term capital expenditure for manufacturing completely unviable, forcing many factories to scale down operations or exit the business entirely.
The credit squeeze was further aggravated by CBN’s policy decision to halt its direct development finance interventions, including suspending new applications under the Real Sector Support Fund. By cutting off access to these single-digit concessionary capital windows, the monetary authority abruptly exposed the sector to commercial banking realities. MAN warned that if this credit stranglehold continues, it will inevitably suppress industrial capacity utilization, worsen national unemployment, fuel inflation through severe supply shortages, and ultimately derail the 2025 Nigeria Industrial Policy.
To reverse this damaging trend, the association is calling for immediate federal intervention. MAN urges the government to urgently release the N1 trillion Manufacturing Stabilisation Fund, significantly recapitalize the Bank of Industry, and lower benchmark interest rates. Furthermore, they recommend reducing cash reserve requirements for commercial banks that actively lend to the manufacturing sector and establishing government-backed guarantees for industrial loans. Ajayi-Kadir emphasized that Nigeria’s ambitions to transform into a competitive global manufacturing powerhouse will remain permanently stalled until policy promises are translated into accessible, transparently managed capital for domestic producers.
What to Know:
The warning from the Manufacturers Association of Nigeria comes at a time when the sector is already battling the effects of naira devaluation, soaring energy costs, multiple taxes, foreign exchange volatility and borrowing rates exceeding 30 per cent. Manufacturing has remained central to the Federal Government’s economic diversification agenda and the 2025 Nigeria Industrial Policy, yet industry operators argue that delayed policy implementation and expensive credit are forcing many factories to scale down production or shut down entirely. Analysts say sustained declines in financing for manufacturers could reduce local production, increase dependence on imports, worsen unemployment, fuel inflation through supply shortages and slow Nigeria’s long-term industrialisation ambitions.
