The Manufacturers Association of Nigeria (MAN) has reiterated its demand for the N1 trillion Manufacturing Stabilisation Fund, cautioning that reduced bank credit to the sector imperils industrial growth, job creation, and economic diversification.
On Tuesday, MAN released a position paper stating that commercial bank credit to the manufacturing sector dropped by ₦1.92 trillion (22.5%) from ₦8.53 trillion in December 2024 to ₦6.61 trillion in December 2025. One of the most severe contractions among major economic sectors, with only the General Services sector seeing a greater reduction in credit.
According to MAN, the credit squeeze comes at a time when the sector is grappling with high energy costs, foreign exchange challenges and elevated borrowing rates, making it increasingly difficult for manufacturers to sustain operations and expand capacity.
The Director General of MAN, Segun Ajayi-Kadir, said the continued delay in implementing the ₦1 trillion Manufacturing Stabilisation Fund, first announced under the Federal Government’s Accelerated Stabilisation and Advancement Plan (ASAP), has worsened financing challenges for manufacturers.
“The persistent non-implementation of the ₦1 trillion Manufacturing Stabilisation Fund remains an issue of promise not kept for the manufacturing sector. For two years, manufacturers have awaited this fund to cushion the impact of currency devaluation and rising energy costs,” the association stated.
MAN argued that manufacturers are being forced to operate in an environment where average prime lending rates remain around 27 per cent, while maximum lending rates exceed 35 per cent, making long-term investments financially unattractive.
The association also attributed the decline in credit access to the Central Bank of Nigeria’s tight monetary policy stance, high Cash Reserve Ratio requirements for banks and growing risk aversion within the banking sector.
According to the group, commercial banks have increasingly redirected funds toward short-term, high-yield investments rather than long-term industrial financing, leaving manufacturers with limited access to affordable credit.
MAN warned that the continued contraction in credit could further suppress manufacturing capacity utilisation, weaken the sector’s contribution to Gross Domestic Product, increase unemployment and worsen inflationary pressures through reduced domestic production.
The association noted that Nigeria’s manufacturing sector currently contributes less than 10 per cent to GDP and cautioned that inadequate financing could undermine the objectives of the Nigeria Industrial Policy aimed at boosting industrial productivity and competitiveness.
To address the challenge, MAN urged the Federal Government and the Central Bank of Nigeria to immediately operationalise the ₦1 trillion Stabilisation Fund and channel its management through the Bank of Industry.
The association further called for a reduction in benchmark interest rates, lower Cash Reserve Ratio requirements for banks supporting manufacturers, expansion of Bank of Industry intervention funds and the introduction of government-backed guarantees for loans extended to small and medium-scale manufacturers.
MAN maintained that achieving meaningful industrialisation would remain difficult unless manufacturers gain access to affordable, long-term financing.
“Until policy promises are translated into accessible capital, Nigeria’s ambition to transform into a competitive manufacturing powerhouse will remain stalled,” the association stated.
