The Manufacturers Association of Nigeria  (MAN) has urged the Monetary Policy Committee (MPC)  to consider a cut in the monetary policy rate (MPR), arguing that retaining the current 27.5% rate will not sufficiently address inflationary pressure.

 

 

Acknowledging the efforts of the Monetary Policy Committee (MPC) at stabilising the monetary parameters, to enable it stem  inflationary pressure, the association, in a statement issued on Sunday,  however argued that  the committee’s retention of the  current rate of 27.5% might hinder its efforts at repositioning the economy on the path of growth.

 

 

It argued that the  MPR,  adopted months ago, was responsible for the surge  in the cost of borrowing, as the average lending rate to manufacturers stood at more than 35% as at January 2025.

 

 

“ The rate also had trickle-down effects on production cost, impacting prices of finished products, capacity utilization, inventory of unsold goods and competitiveness negatively.

 

 

“In 2024 alone, capacity utilization stood at 57 percent, inventory of unsold goods rose to N2,140 billion from N1,141.33 billion recorded in 2023. These impact points combined to create uncertainty, disrupt production and investment plans,” it stated

 

 

MAN argued that a rate cut has become imperative to reduce the cost of borrowing and attract investment in the real sector.

 

 

It added that it has become critical for  the Government to consider the need to support the development of the real sector of the economy especially the manufacturing and Agricultural sectors, to aid the effectiveness of stabilization policy.

 

 

The association also called for the commencement of the implementation of the Nigeria First Policy, so as to boost local patronage, and provide incentives for investment in backward integration and local sourcing of raw materials.

 

 

This, it argued, will reduce the pressure on the dollar to the barest minimum.

 

 

MAN would also want the government to intensify its ongoing efforts at tackling insecurity in farming communities, so as to boost agricultural production and transport logistics, and in consequence,  reduce food inflation.