MAN Reports 9.5% Drop in Manufacturing Credit, Warns Recovery Remains Fragile

The Manufacturers Association of Nigeria (MAN) has reported a 9.5 per cent decline in credit to the manufacturing sector, which fell to N7.72 trillion as of March 2025 from N8.53 trillion in December 2024. The association described the sector’s recovery as fragile, urging urgent policy interventions to sustain growth.

The findings were revealed in the Third Quarter 2025 Manufacturers CEO’s Confidence Index (MCCI) report, released in Lagos on Tuesday. MAN highlighted that high energy costs, limited foreign exchange liquidity, and declining credit continued to constrain the real sector, despite modest improvements in output and business confidence.

MAN Director General Segun Ajayi-Kadir noted that the sector’s resilience remains limited. “High lending rates averaging 36.6 per cent, reduced credit access of N7.72 trillion, and rising unsold inventories of N1.04 trillion continue to hinder manufacturing performance,” he said.

Ajayi-Kadir added that capacity utilisation improved slightly to 61.3 per cent in the first half of 2025, up from 57.6 per cent in the second half of 2024, but warned that the gains are vulnerable without decisive government action. “Our data show the manufacturing sector is beginning to stabilize after a turbulent period, but the recovery is fragile and could easily falter without deliberate, industry-friendly interventions,” he said.

The association called on the Federal Government to focus on reducing energy costs, improving foreign exchange liquidity, and expanding access to affordable credit to accelerate industrial growth.

MAN also reported that manufacturing value added fell sharply to $25.36 billion in 2024 from $55.9 billion in 2023, reflecting reduced competitiveness under high exchange rates, inflation, and interest rates. Despite macroeconomic challenges, manufactured exports showed resilience, rising to N803.8 billion in Q2 2025 from N294.4 billion in Q1.

The report further revealed that 18,935 jobs were lost in the first half of 2025, compared to 10,891 in the second half of 2024, due to high input costs and foreign exchange shortages.

While the MCCI recorded a slight improvement from 50.3 points in Q2 2025 to 50.7 points in Q3 2025, MAN stressed that overall business conditions remain below the 50-point neutral threshold. Ajayi-Kadir attributed the minor uptick to “a continuous disinflation trend and a more stable exchange rate,” but warned that energy costs and gas supply disruptions continue to limit output in several subsectors.

MAN President Francis Meshioye described the slight rebound as a sign of gradual recovery but emphasized that persistent constraints must be addressed. He urged the government to implement a private sector–driven industrial policy aligned with the proposed Nigeria First Policy and the upcoming National Industrial Policy.

The association also called on the Central Bank of Nigeria to deepen its recent interest rate cut, arguing that more aggressive reductions could lower the cost of credit and stimulate real sector investment.

MAN identified improvements in six manufacturing groups—Plastics & Rubber, Electrical & Electronics, Food & Beverages, Chemical & Pharmaceuticals, Textile & Footwear, and Basic Metal & Steel—thanks to local raw material sourcing, stable polypropylene supply, fibre optic expansion, and easing foreign exchange pressures. However, four other groups recorded declines due to high energy costs, gas disruptions, illegal logging, limited government patronage, and competition from imported products.

Ajayi-Kadir concluded that sustaining the sector’s fragile rebound requires coordinated fiscal and monetary policies. “Currency stability is more than a macroeconomic metric; it reflects national resolve. To secure stabilization gains and accelerate prosperity, Nigeria must place manufacturing at the heart of its growth strategy,” he said.

Dr. Oluwasegun Osidipe, Director of MAN Research and Economic Policy Division, presented the MAN Think Tank report alongside the MCCI, urging fast-tracked industrial policies, improved pipeline security, expanded local refining capacity, and disciplined tax enforcement ahead of the January 2026 tax reforms.