- Continuous MPR hikes have not curbed inflation, now at 34.19%.
- High borrowing costs stifle manufacturing sector growth and competitiveness.
- MAN and LCCI urge a balanced approach to monetary policy to support economic stability.
The Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) have expressed concerns over the continuous hike in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN). Despite significant increases in MPR, inflation remains high, reaching 34.19% in June 2024.
MAN’s Director General, Mr. Segun Ajayi-Kadir, stated that these hikes are constraining the manufacturing sector by reducing consumer purchasing power, escalating production costs, and decreasing competitiveness and sales.
Nigerian Economic Growth Threatened by Interest Rate Hikes
The Lagos Chamber of Commerce and Industry (LCCI) echoed these concerns, with Director General Dr. Chinyere Almona calling for a more balanced approach to monetary policy. Almona suggested that instead of continuous MPR hikes, the CBN should implement policies that address supply-side constraints. Improving agricultural productivity and stabilizing energy prices could help mitigate inflationary pressures without harming business operations and economic growth.
Both MAN and LCCI urge the government to expedite the disbursement of special provisions earmarked for the manufacturing sector, such as the N75 billion single-digit loan and the recently announced N1 trillion.
Additionally, they advocate for measures to minimize reliance on imported raw materials by incentivizing local sourcing and backward integration. These steps could help stabilize the sector and support sustainable economic growth in Nigeria.
To support sustainable economic growth, it is crucial for Nigeria’s monetary policy to balance inflation control with measures that address the needs of the manufacturing sector. This approach will ensure that the sector continues to contribute to employment, productivity, and economic stability.
“The manufacturing sector in Nigeria plays a vital role in the country’s economy. However, it is facing multitude of challenges that threaten its sustainability and contribution to economic growth.” – Segun Ajayi-Kadir, Director General of MAN
