April 02, (THEWILL) — Manufacturers in Nigeria continue to grapple with steep borrowing costs of up to 60 per cent, despite recent monetary policy easing by the Central Bank of Nigeria (CBN), according to new data from the apex bank.
The latest adjustment marks the second rate cut under the current CBN leadership, following a 50-basis-point reduction in September 2025 and a pause in November.
CBN Governor Olayemi Cardoso said the decision reflects “a balanced evaluation of risks,” expressing optimism that disinflation will persist, supported by earlier tightening measures, improved exchange rate stability, and better food supply.
However, the impact on lending conditions remains limited. Data as of March 20, 2026, shows wide disparities in lending rates across banks.
While some institutions offer relatively low prime rates, others charge over 30 per cent, pushing maximum borrowing costs to extreme levels for manufacturers.
This gap between lending and deposit rates underscores the high cost of financial intermediation, with manufacturers bearing the burden.
Credit to the sector fell from N8.53tn in December 2024 to N7.09tn by September 2025—a 16.9 per cent decline—highlighting reduced borrowing amid high rates, weak demand, and rising costs.
Industry stakeholders warn that persistently high interest rates are stifling long-term investment.
The Nigerian Association of Small and Medium Enterprises described current conditions as discouraging for private sector borrowing.
Meanwhile, foreign investment in manufacturing dropped sharply by 45.9 per cent year-on-year, reflecting growing investor preference for lower-risk sectors with quicker returns.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
