ABUJA, Nigeria (VOICE OF NAIJA)-The Manufacturers Association of Nigeria has attributed the sharp decline in bank lending to the manufacturing sector to the Federal Government’s failure to implement the proposed N1tn Manufacturing Stabilisation Fund, rising borrowing costs, structural bottlenecks and policy inconsistencies.
The association raised the concern on Tuesday following data released by the Central Bank of Nigeria, which showed that commercial bank credit to manufacturers dropped by N1.92tn, from N8.53tn in December 2024 to N6.61tn in December 2025, representing a 22.5 per cent year-on-year decline.
In a statement the Director-General of MAN, Segun Ajayi-Kadir, described the development as alarming, noting that manufacturing recorded one of the steepest reductions in credit among the country’s major economic sectors.
He pointed out that the sector now trails the oil and gas industry, which received N10.59tn in credit, and the finance sector, which attracted N9.24tn.
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“According to the CBN data, commercial bank credit allocation to manufacturing contracted by N1.92tn from N8.53tn in December 2024 to N6.61tn in December 2025.
This represents a significant year-on-year contraction of 22.5 per cent, which is particularly disturbing, given that manufacturing recorded one of the largest credit contractions among the top sectors,” Ajayi-Kadir said.
The MAN DG linked the decline to high borrowing costs, banks’ cautious lending practices and the continued delay in implementing the N1tn Manufacturing Stabilisation Fund included in the Federal Government’s Accelerated Stabilisation and Advancement Plan.
“The persistent non-implementation of the N1tn Manufacturing Stabilisation Fund, despite its prominent inclusion in the Accelerated Stabilisation and Advancement Plan since 2024, remains an issue of promise not kept for the manufacturing sector. For two years, we have awaited this fund to ameliorate the credit crunch in the sector and to cushion the impact of the twin shocks of currency devaluation and astronomical energy costs. There appears to be no visible effort at delivering on that score,” Ajayi-Kadir said.
He noted that the delay has compelled manufacturers to operate in a challenging high-interest-rate environment without the anticipated government support.
“This delay is worrisome. It has left genuine manufacturers to navigate an over 30 per cent interest rate environment without the promised fiscal cushion. As factories continue to scale down operations or exit the business altogether, the gap between policy promises and actual disbursement is symptomatic of an implementation deficit that continues to stifle Nigeria’s industrial potential,” he stated.
Ajayi-Kadir also criticised prevailing lending conditions, arguing that current interest rates make long-term investments unattractive for manufacturers.
“The primary barrier between manufacturers and financial liquidity is the exorbitant cost of borrowing. As of May 2026, manufacturers’ costs of borrowing remain exploitatively high at an average of 27 per cent prime lending rates and 35.6 per cent maximum lending rates in major commercial banks, creating an environment where borrowing for long-term manufacturing capital expenditure is financially unviable,” he said.
The MAN chief further connected the decline in manufacturing credit to the CBN’s decision to discontinue direct development finance interventions, including new applications under the Real Sector Support Fund.
“The steep 22.5 per cent contraction in manufacturing credit could also be linked to the Central Bank of Nigeria’s policy decision to halt its direct development finance interventions. By suspending new applications for real-sector support windows, the monetary authority has abruptly cut off manufacturers from vital single-digit concessionary capital,” Ajayi-Kadir said.
He warned that persistent credit constraints could reduce capacity utilisation, worsen unemployment, drive inflation through supply shortages and hinder the implementation of Nigeria’s 2025 Industrial Policy.
To reverse the trend, MAN called on the government to immediately release the N1tn Manufacturing Stabilisation Fund, strengthen the capital base of the Bank of Industry, lower benchmark interest rates, reduce cash reserve requirements for banks lending to manufacturers and introduce government-backed guarantees for industrial loans.
“The government should demonstrate its commitment to economic diversification by establishing independent, transparently managed transmission channels capable of delivering genuine, single-digit interest rates directly to domestic manufacturers. Until policy promises are translated into accessible capital, Nigeria’s ambition to transform into a competitive manufacturing powerhouse will remain permanently stalled,” Ajayi-Kadir said.