MAN welcomes 350bp MPR cut, lists 13 measures to turn cheaper borrowing into real relief for manufacturers

Key points

• Rate cut welcomed. MAN says the MPC’s 350-basis-point cut in the MPR, to 23.0 per cent from 26.5 per cent, will lower borrowing costs and improve manufacturers’ capacity to fund inventory, raw materials, equipment and expansion.
• CRR could blunt the benefit. With the Cash Reserve Requirement held at 45 per cent for deposit money banks and 16 per cent for merchant banks, MAN warns that less money will be available for lending to the real sector. It adds that high power, logistics and infrastructure costs will limit the gains, and it wants more rate cuts.
• 13-point agenda. MAN asks government to review the CRR, create a dedicated FX window for manufacturers, and operationalise the N1 trillion Manufacturing Stabilisation Fund at 9 per cent. It also wants development finance for manufacturing SMEs at 5 per cent, plus measures on energy, logistics and credit guarantees.

The Manufacturers Association of Nigeria (MAN) has welcomed the Central Bank of Nigeria’s 350-basis-point cut to the Monetary Policy Rate (MPR). It says the move will ease borrowing costs for manufacturers, but that the benefit will be limited unless banks lend more and government deals with the structural costs of production.

In a statement to the media, signed by Director General Segun Ajayi-Kadir, the association set out 13 policy measures for the government’s consideration.

What the MPC did

At its 307th meeting on September 21-22, 2026, the Monetary Policy Committee (MPC) cut the MPR to 23.0 per cent from 26.5 per cent. It also adjusted the Standing Facilities Corridor to +50/-300 basis points around the MPR. The Cash Reserve Requirement (CRR) stays at 45 per cent for deposit money banks and 16 per cent for merchant banks, and at 75 per cent for non-Treasury Single Account (TSA) public-sector deposits. The Liquidity Ratio is unchanged at 30 per cent.

The decision comes as headline inflation eased to 15.39 per cent in August from 15.43 per cent in July, according to the National Bureau of Statistics. Gross external reserves stood at about $55.25 billion as of September 18, according to the MPC communique.

MAN’s assessment

MAN says the cut is a significant easing of policy and matches its own forecast that easing should follow a period of stabilisation. It describes the move as a gradual shift away from the tight conditions that, in its view, have contributed to poor performance in manufacturing.

The CBN, however, described the move as an operational realignment meant to strengthen policy transmission and reinforce the MPR as its main policy signal, not a change in its underlying stance.

The association expects lower rates to improve manufacturers’ capacity to finance inventory, raw materials, production cycles, equipment purchases and expansion. It also says the revised corridor should improve liquidity management in the banking system and support more efficient pricing of short-term funds.

The CRR problem

MAN’s main reservation is the unchanged CRR. It argues that with such a large share of deposits held as reserves, banks will have less to lend to productive sectors, and that the gains from the rate cut may not be fully realised if credit to the real sector stays constrained.

The association also expects the cut to push down yields on short-term government securities, including Treasury bills and Open Market Operations (OMO) instruments. That would reduce the Federal Government’s debt-servicing costs and slightly narrow the yield spread for foreign portfolio investors.

MAN says how much manufacturers gain will depend on how quickly and strongly the cut reaches actual lending rates. It also depends on complementary action on electricity supply, logistics costs, road infrastructure and ease of doing business. It wants further rate cuts and calls for closer coordination between monetary and fiscal authorities.

MAN’s 13 proposals

1. Expand access to concessionary, single-digit financing for manufacturers, especially small and medium industries (SMIs) and firms in strategic sectors.
2. Progressively review the high CRR for deposit money banks, where macroeconomic conditions permit, to create more lending capacity while safeguarding financial stability.
3. Work with deposit money banks and the Bankers’ Committee so the 350bp cut translates directly into lower prime and maximum lending rates for local manufacturers.
4. Address structural production constraints, including electricity costs, transport and logistics expenses, infrastructure deficits and insecurity.
5. Cut industrial energy costs through better electricity supply, greater domestic gas utilisation and incentives for alternative and renewable energy.
6. Accelerate implementation of the Nigeria First Policy to strengthen domestic value chains, promote local sourcing of raw materials and reduce import dependence.
7. Fully implement the recent Memorandum of Understanding between the Ministry of Finance and the CBN, with measurable gains in policy coordination, investor confidence and business predictability.
8. Use the growing external reserves buffer to create a dedicated, transparent FX window for legitimate manufacturers importing capital equipment and raw materials not available locally, reducing reliance on parallel market premiums.
9. Strengthen the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and similar credit guarantee funds to cover industrial SME risk, so banks lend without demanding exorbitant collateral.
10. Re-energise low-interest intervention windows at the Bank of Industry (BOI) and Development Bank of Nigeria (DBN), offering single-digit or low double-digit long-term loans strictly for raw material processing, machinery imports and local equipment fabrication.
11. Operationalise the N1 trillion Manufacturing Stabilisation Fund at 9 per cent through BOI, with transparent eligibility criteria and timely disbursement.
12. Provide development finance for manufacturing SMEs at 5 per cent, with tenors and repayment structures that match production and investment cycles.
13. Make future MPC meetings focus heavily on assessing the MPR’s impact on manufacturing and other productive sectors, with accelerating productivity as the critical issue.

What’s Being Said

MAN says “more cuts are needed to achieve meaningful impact” and that “lower interest rates alone cannot resolve the structural constraints” that raise production costs. It closes by encouraging the MPC to keep calibrating policy to balance macroeconomic stability with the need to stimulate investment, industrialisation and job creation.

Bottom line

MAN backs the direction of policy but not yet its reach. Its case is that the MPR cut will do little for factories until banks pass it on, the CRR eases and power and logistics costs come down.