POSITION OF MANUFACTURERS ASSOCIATION OF NIGERIA ON THE REPORT OF MONETARY POLICY COMMITTEE MEETING HELD ON NOVEMBER 24-25, 2025.
1.0 INTRODUCTION
1.1 The Monetary Policy Committee of the Central Bank of Nigeria held the 303rd Meeting on November 24 -25, 2025. The committee reviewed the current economic development alongside the macroeconomic indicators. Members expressed satisfaction with Nigeria’s macroeconomic stability, highlighting key improvements such as the continued slowdown in inflation, steady real output growth, a stable exchange rate, and stronger external reserves. The Committee particularly noted the accelerated pace of disinflation standing at 16.05 percent in October 2025, the most significant in seven months, attributing this progress to sustained monetary tightening, increased capital inflows, a surplus in the current account, as well as moderating fuel prices, all of which have collectively ease the inflationary pressures.
1.2 In the light of the observed indices, the Committee agreed to retain the benchmark interest rate at 27.00 percent that was fixed at the September meeting while adjusting the Standing Facilities Corridor to +50 / -450 basis points around the MPR from +250/-250 basis points to encourage borrowing from the central bank, pushing commercial banks to lend more and reducing upward interest-rate volatility. The cash Reserve Ratio (CRR) was also retained at 45 per cent for commercial banks and 16 per cent for merchant banks, the committee also retained the 75 per cent CRR on non-TSA public sector deposits to manage excess liquidity while maintaining the liquidity ratio at 30 percent
2.0 IMPLICATION OF MPC DECISION ON MANUFACTURING SECTOR
2.1 The Manufacturers Association of Nigeria (MAN) appreciates the decision of MPC to halt the increase in MPR and to maintain the 27.00 percent fixed at the last meeting. The decision to adjust the standing facilities corridor to enhance liquidity is also noted. However, the expectation of the Association is a further reduction in the rate to reduce the cost of borrowing for manufacturers.
2.2 Despite the reduction at the last meeting,borrowing costs of 30 to 37 percent remainhigh for manufacturers. The rate hinders production and reduces the competitiveness of the sector. The emphasis on exchange rate stability and improved forex liquidity is vital, as manufacturers rely on foreign exchange for imports, but it is essential to reduce the cost of funds to encourage borrowing for expansion and investment.
2.3 Persistent high lending rates will further limit access to affordable credit for manufacturers, especially those within the SMI cadre. The situation is complicated with prevailing structural challenges like poor infrastructure, high logistics costs, inadequate electricity supply,high energy costand insecurity that cumulatively raise production costs and weaken competitiveness.
2.4 MAN urges the Central Bank and other policymakersto continue to pursue policies thatfoster inclusive growth, incentivize manufacturing and address binding constraintslimiting the performanceof the sector. The CBN should alsostrengthen handshakewithfiscalauthorityto promote reformscapable of unlocking the full potential of the manufacturing sector.Top of FormBottom of Form
3.0 RECOMMENDATIONS
In consideration of the current economic conditions, thedecisions of the MPC,and the need for the sector to fully leverageon the emerging macroeconomic stability for productive growth, the Association herebyrecommends as follows:
3.1 The Central Bank should adopt a downward review of the rate in the subsequent MPC meetings to lessen the burden of high borrowing costsand incentivize long-term investments in manufacturing, particularly in capital-intensive sub-sectors.
3.2 CBN should consider additional policy instruments or incentives that facilitate credit flow to the real sector of the economy, especially the manufacturing sector
3.3Government to strengthen fiscal discipline while upscaling investment in infrastructure (Roads, Power and Logistics) to boost the supply capacity of the sector
3.4 The Federal Government should collaborate closely with the Central Bank of Nigeria (CBN) to stabilize the naira and manage external risks by monitoring the potential risk of capital flights because of the MPC’s corridor review that will push banks to lend more
3.5Government to implement complementary fiscal measures that support industrial development and promote structural reforms especially in real sectors of the economy including Agricultural, Manufacturing and Energy sectors to further reduce inflationary pressure.
3.6Urgently resolve the lingering spate of insecurity in the country, especially in agricultural and industrial zones to stabilize food supply and raw material inputs. A secure environment is critical to food security, lower inflation rate and sustained industrial growth in both urban and rural areas.
3.6 MAN urges the CBN to Monitor and evaluate the impacts of previous MPC decisions on credit access to the real sector to aid informed position at subsequent meetings
4.0 CONCLUSION
The Manufacturers Association of Nigeria reiterates its appreciation of the CBN’s efforts to stabilize the economy and ease inflationary pressures. The decision to adjust the MPC’s corridor is a way to encourage banks to lend rather than hording liquidity However, it is essential for Government to seize the opportunity to promote credit-led growth, especially in productive sectors, while managing risks through fiscal discipline and structural reforms.Stronger coordination between fiscal and monetary authorities is key to ensure positive impact of the MPC decision on the manufacturing sector, the economy and sustainable development.
