The Manufacturers Association of Nigeria (MAN) has expressed concern over the sharp decline in commercial bank lending to the manufacturing sector, warning that the trend could weaken industrial growth, reduce job creation and hinder Nigeria’s economic diversification agenda.
Director-General of MAN, Segun Ajayi-Kadir, disclosed this in a statement issued on Tuesday in Lagos while reacting to credit allocation figures for 2025.
According to him, commercial bank credit to the manufacturing sector declined by N1.92 trillion, falling from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
The decline represents a 22.5 per cent year-on-year contraction and places manufacturing among the sectors most affected by shrinking access to credit.
Ajayi-Kadir described the development as troubling, noting that the manufacturing sector now trails behind the oil and gas industry, which attracted N10.59 trillion in credit, and the financial sector, which received N9.24 trillion.
He argued that the allocation pattern reflects a growing preference for speculative and rent-seeking activities over productive sectors capable of driving sustainable economic growth.
According to the MAN chief, the trend stands in sharp contrast to developments in emerging economies such as India and Vietnam, where industrial credit expanded significantly in 2025 to support manufacturing growth and economic transformation.
“Clearly, 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,” he said.
Ajayi-Kadir attributed the decline in manufacturing credit to several factors, including high interest rates, bureaucratic bottlenecks and policy inconsistencies.
He also criticised the continued delay in implementing the N1 trillion Manufacturing Stabilisation Fund, which was introduced under the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP) in 2024.
According to him, manufacturers have waited for two years to access the intervention fund, which was designed to cushion the effects of currency depreciation and rising energy costs on industrial operations.
“The delay has left genuine manufacturers to operate in an interest-rate environment exceeding 30 per cent without the promised fiscal support.
“As factories continue to scale down operations or exit the market, the gap between policy promises and actual disbursement highlights an implementation deficit that continues to constrain industrial development,” he said.
The MAN director-general warned that the prolonged credit squeeze could have far-reaching consequences for the economy.
He identified declining manufacturing capacity utilisation, slower sectoral growth, job losses, supply-side inflation and increased foreign exchange pressures as some of the major risks associated with inadequate financing.
Ajayi-Kadir further cautioned that limited access to affordable credit could undermine the successful implementation of the 2025 Nigeria Industrial Policy (NIP), which aims to accelerate industrialisation and strengthen local production.
“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 kick-start a manufacturing revolution without actively financing the factories tasked with building it,” he stated.
To reverse the trend, MAN called on monetary authorities to reduce benchmark interest rates by between 200 and 300 basis points over the next two quarters to improve access to affordable financing for manufacturers.
The association also urged the government to introduce incentives for commercial banks that allocate a significant portion of their loan portfolios to manufacturing at single-digit interest rates.
Ajayi-Kadir further recommended increasing the capital base of the Bank of Industry (BOI) and expanding its intervention programmes to support industrial growth.
He also proposed the immediate operationalisation of a 50 per cent government-backed loan guarantee scheme for small and medium-scale manufacturers.
In addition, MAN called for the immediate release of the N1 trillion Manufacturing Stabilisation Fund and recommended that its administration be transferred to the Bank of Industry.
According to the association, the fund should carry a maximum interest rate of nine per cent and provide a seven-day processing timeline for qualified manufacturers.
Ajayi-Kadir also urged the government to conduct an urgent audit of the manufacturing sector to evaluate the impact of recent economic reforms and identify areas requiring policy intervention.
He stressed that Nigeria’s ambition to become a globally competitive manufacturing hub can only be achieved if policy commitments are matched with accessible and affordable financing.
“Until policy promises are translated into accessible capital through transparent and effective channels, Nigeria’s ambition of becoming a competitive manufacturing powerhouse will remain stalled,” he said.
