Manufacturers Association Says “Sector Is on Its Last Breath,” Tells FG to Stop Interest Rate Hikes

The Manufacturers Association of Nigeria (MAN) has raised alarm over the deteriorating state of the manufacturing sector, warning that it is “on its last breath” due to mounting economic challenges. The association urged the federal government to implement urgent interventions to prevent further decline.

In its Fourth Quarter 2024 Manufacturers CEOs Confidence Index, signed by Director General Segun Ajayi-Kadir, MAN detailed Nigerian manufacturers’ struggles, including high electricity tariffs, an unstable exchange rate, surging interest rates, and multiple taxation.

The report expressed concern that 2025 would be a defining year for the industry, with manufacturers lowering their expectations for the first quarter due to harsh macroeconomic conditions and a predicted business slowdown in early 2025.

2025 is a pivotal year and the outcome will be crucial for this most significant sector. The exorbitant electricity tariff hike, high exchange rate, multiple taxation, high interest rate, low credit access and insecurity remain some of the top challenges of manufacturers,” the report stated.

MAN emphasised that President Bola Tinubu’s goal of reducing inflation to 15% and stabilising the naira at N1,500/$ must be backed by clearly defined policies with specific timelines.

To restore confidence in local production, the association called on government ministries, departments, and agencies (MDAs) to prioritise patronising Nigerian-made goods.

As part of its recommendations, MAN urged the federal government to Suspend the 15 per cent hike in port charges and 4 per cent FOB levy pending wider consultation with the Organised Private Sector. Implement the National Single Window (NSW) project to streamline trade, cut business costs, and boost Nigeria Customs Service (NCS) revenue without raising import duties. Pause interest rate hikes and increase the Bank of Industry’s capital base to improve manufacturers’ credit access. Settle the $2.4 billion Forex forward contract to restore investor confidence.

The association warned that failure to act swiftly could further weaken the country’s economic outlook, stressing that industrial growth and local production must be prioritised to reduce pressure on foreign exchange demand.

It will be recalled that the Chairman of the Ogun State chapter of MAN, George Onafowokan, in December 2024, expressed deep concern over the crisis in Nigeria’s manufacturing sector, attributing significant losses to the government’s decision to float the naira in 2023.

Speaking at the 39th Annual General Meeting of MAN in Ogun State, held under the theme, “Dollar to Naira Cost, the Nigerian Manufacturers’ Daily Dilemma: Exploring Strategies for Business Sustainability,” Onafowokan revealed that 16 major manufacturers have faced combined losses of N792 billion. He attributed this setback to the steep depreciation of the naira, which saw the exchange rate surge to NGN1,900 to $1 by early 2024.

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