In a bid to reduce the financial pressures on Nigeria’s Manufacturing sector, the Manufacturers Association of Nigeria (MAN) has urged the federal government to reduce the interest rates on industrial loans. Industry experts believe that the high current rates are severely impacting businesses and hindering their ability to expand. This challenges local manufacturers in maintaining operations and supporting the national economy. At a recent meeting in Ilorin, Chief Bioku Rahman, the Chairman of MAN in Kwara and Kogi, expressed concern over the existing interest rates.
Despite government initiatives to support the industry, he emphasised that the increased cost of loans affected growth. The meeting, themed “Tackling the Challenges of the Manufacturing Sector: A Win-Win For Government and Local Manufacturers,” provided a platform for industry stakeholders to voice their concerns and propose solutions to revitalise the manufacturing sector. Rahman urged the federal government to instruct The Central Bank of Nigeria (CBN) to reduce interest rates on industrial loans to one percent.
BOI, CBN urged to approve further reductions in industrial lending rates.
He argued that this level would be easier for manufacturers to handle, emphasising that the existing rates are unsustainable and harmful to the survival of various businesses in the industry. Furthermore, Rahman stressed the importance of commercial banks adhering to this directive, emphasising that their collaboration is essential for any effort to alleviate financial pressures on manufacturers. He requested that the CBN and commercial banks lower interest rates and urged the Bank of Industry (BOI) to do the same by authorising additional decreases in Lending Rates to industries.
Also, he stated that such action would offer instant support to manufacturers and stimulate increased Investment in the industry, leading to Economic Growth and job opportunities across various regions in the country. He further emphasised the importance of establishing a Heavy-Duty Gas-Energy Generation and Distribution Plant for industrialists in Kwara. He believed that this Infrastructure is essential for stimulating local manufacturers’ efficiency and competitive edge, especially in a region with the capacity to emerge as a centre for industrial development.
Various projects has been initiated to boost economic development.
Mrs. Damilola Adelodun, the Commissioner for Business, Innovation and Technology, reiterated the state government’s dedication to assisting the manufacturing industry during the meeting. Acting on behalf of Governor AbdulRahman AbdulRazaq from Kwara, Adelodun reassured the association that the government is aware of manufacturers’ challenges and is actively working to improve their business conditions. She pointed out various projects led by the state government, such as the Urban Renewal Initiative, which seeks to transform Kwara’s urban design. This endeavour aims to enhance the state’s appeal to businesses and residents, ultimately stimulating economic development.
Adelodun emphasised that the government’s efforts focus on improving the state’s Economy by providing the necessary infrastructure and policies to enable manufacturers to thrive. She also mentioned the government’s ongoing work to upgrade infrastructure around industrial estates, acknowledging that such improvements are essential for the smooth operation of businesses within the sector. In his remarks, Chief Francis Meshioye, the President of MAN, commended the Kwara State Government for its supportive move towards the association. He described the relationship between the state government and MAN as a good one and expressed optimism that this partnership would continue to yield positive results for the manufacturing sector.
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On the other hand, Meshioye emphasised the importance of additional infrastructure improvements in and around industrial areas. These upgrades are essential to maintaining the sector’s long-term viability and expansion. The call for a reduction in interest rates comes when the manufacturing industry faces several challenges, including high production costs, limited access to finance, and inadequate infrastructure. By addressing these issues, the federal government, in collaboration with state governments and financial institutions, can create a more favourable environment for manufacturers, thereby driving economic growth and development across the country. The MAN is optimistic that their plea will be considered, leading to a more robust and flexible manufacturing industry.