Manufacturers Association of Nigeria Criticizes New Interest Rate Hike

 The Manufacturers Association of Nigeria (MAN) has expressed deep concern over the Central Bank of Nigeria's (CBN) ongoing interest rate hikes, which have seen the benchmark rate surge by 1,475 basis points from 11.5% in May 2022 to 26.25% in May 2024. This increase was further amplified by a 50 basis point rise to 26.75% in July.

Segun Ajayi-Kadir, Director General of MAN, highlighted that despite the aggressive monetary tightening, inflation remains stubbornly high, reaching a 28-year peak of 34.19% in June 2024. He criticized the CBN’s decision, arguing that the new rate will exacerbate challenges for the manufacturing sector by further diminishing consumer purchasing power, increasing production costs, and hindering industry growth.

Ajayi-Kadir pointed out that the continuous rise in the Monetary Policy Rate (MPR) has not curbed inflation but has instead led to a substantial increase in the cost of borrowing. This, he noted, impacts manufacturers by raising production costs and prices of finished goods, which could result in higher unemployment, social instability, and reduced investment opportunities.

The MAN Director General warned that if the trend continues unchecked, it could severely disrupt the manufacturing sector, limit competitiveness, and stifle innovation and growth. The association's concerns underscore the broader implications of monetary policy on Nigeria's economic landscape, particularly within the crucial manufacturing sector.