The Manufacturers Association of Nigeria (MAN) has urged the federal government to expedite the disbursement of the N75 billion and the newly announced N1 trillion intervention loans for the manufacturing sector to mitigate the effects of continuous interest rate hikes. Meanwhile, the Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to diversify its inflation control strategies beyond just rate hikes.
The Director General of MAN, Segun Ajayi-Kadir, made this appeal following the CBN’s announcement on Tuesday that the benchmark interest rate, the Monetary Policy Rate (MPR), would increase to 26.75 percent from 26.25 percent.
Ajayi-Kadir stated, “The government should take deliberate actions to shield the productive sector from the impacts of the continuous MPR hikes by hastening the disbursement of the special funds earmarked for the manufacturing sector. The N75 billion single-digit loan approved by President Bola Tinubu over a year ago and the recently announced N1 trillion loan come to mind.
Additionally, Ajayi-Kadir suggested offering fiscal support to enable the manufacturing sector to import raw materials, spare parts, and machinery not available locally at a concessional duty rate; minimizing pressure on foreign exchange reserves by encouraging backward integration and local sourcing to reduce dependency on imports; and enforcing Executive Order 003 to bolster local industries and increase domestic production by restricting access to foreign exchange for the importation of locally manufactured products.
The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, also responded, urging the government and CBN to adopt a more balanced monetary policy approach. She emphasized that while controlling inflation is essential, it is equally important to mitigate the negative effects on business operations and economic growth.
“The Chamber proposes the following: We should diversify our approach to controlling inflation beyond interest rate hikes. Policies that directly address supply-side constraints, such as improving agricultural productivity and stabilizing energy prices, can help reduce inflationary pressures more effectively.
Increasing investment in infrastructure to alleviate production bottlenecks and reduce business costs will enhance productivity and competitiveness, thereby helping to curb inflation from the supply side,” she said.