The Ogun State branch of the Manufacturers Association of Nigeria (MAN) has urged manufacturers to explore alternative funding options amid a harsh economic climate.
The chairman of the Ogun MAN branch, George Onafowokan, stated this at the association’s 40th annual general meeting (AGM), which was held yesterday in Abeokuta, Ogun State, on the theme ‘Financing Manufacturing Concerns: Exploring Alternatives’.
Onafowokan said, “In 2024, Nigeria’s lending rates experienced significant increases as the Central Bank of Nigeria (CBN) implemented monetary tightening measures to combat inflation.
“The CBN raised its benchmark interest, Monetary Policy Rate (MPR), six times in 2024, culminating in a rate of 27.5 per cent by December, which led to significantly higher borrowing costs for manufacturers. The CBN’s Monetary Policy Committee (MPC) decided to hold the rate at this level at its last meeting in February 2025, according to the CBN.
“This is the second consecutive hold after six consecutive hikes in 2024. The average maximum lending rate commercial banks charged manufacturers varied between 28.6 per cent and 35 per cent. These elevated lending rates led to a decline in credit uptake by manufacturers and discouraged investment and expansion within the sector.”
He lamented the rising cost of accessing finance from commercial banks, citing the high Monetary Policy Rate (MPR), which stood at 27.5 per cent as of May 2025.
He explained that this makes loan repayment burdensome and erodes profit margins, saying ‘to ease this burden, ‘we are exploring other avenues where manufacturers can access affordable funds for operations and expansion.’
Onafowokan said institutions like the Bank of Industry (BOI), LECON Finance Company, and Agusto & Co. were present to guide such alternatives.
Onafowokan further highlighted the industry’s struggles with foreign exchange volatility, inflation, and regulatory burdens, recalling that the naira had devalued from N447 per dollar in December 2022 to N1,605 per dollar by mid-2024, significantly increasing production costs while consumer purchasing power diminished.
He added that Ogun manufacturers continue to operate and invest in the economy despite these challenges.
In response to these challenges, the federal government launched the N75 billion Manufacturing Sector Fund and another N75 billion MSME Intervention Fund, both of which are disbursed through the BOI at a nine per cent interest rate and a one—to five-year repayment period.
Ogun State commissioner for Industry, Trade, and Investment, Adebola Sofela, who represented Governor Dapo Abiodun, commended manufacturers for their resilience and assured them of the state government’s commitment to improving the business environment through tax harmonisation and infrastructure development.
MAN national president Otunba Francis Meshioye urged both state and federal governments to adopt policies that promote local manufacturing.
He emphasised the urgent need to implement the ‘Nigeria First’ policy that mandates all government MDAs, contractors, and agencies to patronise made-in-Nigeria products.
Meshioye appealed to the Central Bank of Nigeria (CBN) to settle the $2.4 billion in unpaid forex forwards owed to manufacturers.
Associate director at Agusto Consulting, Oritsejimi Ogbobine, urged manufacturers to embrace alternative financing models, including equity markets, bonds, green financing, and support from development finance institutions like AfDB, AfrEximBank, and BOI.
