MAN urges manufacturers to embrace alternative funding amid soaring lending rates
The Manufacturers Association of Nigeria (MAN), Ogun state branch, has advised manufacturers to explore alternative funding sources as high interest rates and macroeconomic pressures continue to constrain access to credit.
George Onafowokan, chairman of the Ogun chapter of MAN, gave the advice at the association’s 40th Annual General Meeting held in Abeokuta.
Themed “Financing Manufacturing Concerns: Exploring Alternatives”, the event brought together industry stakeholders to discuss viable financing models for the sector amid tightening monetary conditions.
Onafowokan said Nigeria’s manufacturing sector has struggled with elevated borrowing costs following six interest rate hikes by the Central Bank of Nigeria (CBN) in 2024, which pushed the Monetary Policy Rate to 27.5 percent — a level the apex bank has maintained into 2025.
According to him, commercial lending rates now range from 28.6 to 35 percent, making credit increasingly unaffordable for manufacturers.
“These elevated lending rates discourage investment and expansion,” he said.
“Manufacturers must begin to look beyond traditional bank loans and consider financing from development institutions such as the Bank of Industry, LECON Finance Company, and Agusto & Co.”
Onafowokan also pointed to forex volatility and inflation as additional cost pressures. The naira, he said, depreciated from N447 to N1,605 per dollar between late 2022 and mid-2024, eroding working capital and squeezing margins.
Despite the challenging environment, he commended manufacturers in Ogun for staying resilient and sustaining investments in production.
He described the federal government’s N75 billion Manufacturing Sector Fund and a similar N75 billion MSME Intervention Fund — both managed by the Bank of Industry at nine percent interest — as timely lifelines for struggling firms.
Francis Meshioye, MAN’s national president, called for a ‘Nigeria First’ procurement policy to encourage patronage of locally produced goods.
He also urged the CBN to clear the $2.4 billion in unpaid forex forwards owed to manufacturers, warning that the backlog was choking supply chains and worsening inflation.
Industry experts present at the meeting, including Oritsejimi Ogbobine of Agusto Consulting, recommended alternative funding via the equity and bond markets, green finance, and facilities from multilateral institutions like the African Development Bank (AfDB) and the African Export-Import Bank (AfriExim).
