Nigerian manufacturers decry 22.5% credit drop, warn of economic impact

The Manufacturers Association of Nigeria (MAN) has voiced strong concern over a significant 22.5% year-on-year contraction in commercial bank credit to the manufacturing sector in 2025. Director-General Segun Ajayi-Kadir stated that credit fell by N1.92 trillion, from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.

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commercial bank credit to manufacturing fell by N1.92 trillion, from N8.53 trillion in December 2024 to N6.61 trillion in December 2025, representing a 22.5 per cent year-on-year contraction.

Ajayi-Kadir described the decline as "disturbing," noting that manufacturing experienced one of the steepest credit contractions among major economic sectors. The sector lagged behind oil and gas, which attracted N10.59 trillion in credit, and the finance sector, which received N9.24 trillion. He suggested this trend indicates a growing preference for speculative activities over productive sectors that drive economic growth.

MAN highlighted that this credit squeeze contrasts sharply with trends in emerging economies like India and Vietnam, where industrial credit expanded to support manufacturing. Ajayi-Kadir warned that reduced credit access could limit capacity utilization, stall technological upgrades, and hinder job creation in Nigeria. He attributed the contraction to high interest rates, bureaucratic hurdles, and policy inconsistencies.

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The Nigerian manufacturing sector cannot thrive without sustainable and growing financial foundations.

Furthermore, MAN criticized the non-implementation of the N1 trillion Manufacturing Stabilisation Fund, part of the Federal Government’s 2024 Accelerated Stabilisation and Advancement Plan. Manufacturers have reportedly waited two years for this fund, intended to mitigate currency depreciation and rising energy costs. Ajayi-Kadir noted that factories are operating with interest rates exceeding 30% without promised fiscal support, leading to scaled-down operations or market exits.

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The delay has left genuine manufacturers to operate in an interest-rate environment exceeding 30 per cent without the promised fiscal support.

The association warned that the credit squeeze could lead to reduced manufacturing capacity utilization, stagnation in the sector's GDP contribution, job losses, supply-side inflation, and foreign exchange pressures. MAN cautioned that inadequate access to affordable financing might undermine the successful implementation of the 2025 Nigeria Industrial Policy.

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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.