The commercial bank credit to Nigeria’s manufacturing sector experienced a decline, dropping by N1.92 trillion, or 22.5 per cent year-on-year, from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
Manufacturers Association of Nigeria (MAN) stated this in a report on the sharp decline in credit to the manufacturing sector as this shift emphasizes the need for strategic interventions to bolster manufacturing support in the country.
According to the data, commercial bank credit allocation to manufacturing contracted by N1.92 trillion from N8.53 trillion in December 2024 to N6.61 trillion in December 2025. This represents a significant year-on-year contraction of -22.5 per cent, which is particularly disturbing, given that manufacturing recorded one of the largest credit contractions among the top sectors, surpassed only by the General Services sector at -25 per cent.
This steep decline leaves manufacturing lagging far behind the extractive Oil & Gas Industry (N10.59 trillion) and a booming Finance sector (N9.24 trillion), demonstrating a systemic preference for speculative and rent-seeking activities over tangible productivity
The data reveals that while the manufacturing sector faced a substantial contraction, it highlights an opportunity to rethink and realign our financial strategies. The decline, particularly concerning as manufacturing recorded one of the most significant contractions among major sectors, prompts us to consider the impressive growth rates seen in global counterparts.
For example, India witnessed a notable 9.6 percent year-on-year growth in bank credit to industry, driven by a deliberate push for a 15 percent expansion. Similarly, Vietnam has set ambitious credit growth targets of 19 to 20 percent to invigorate its manufacturing domain.
The director-general of MAN, Segun Ajayi-Kadir, pointed out that “establishing a robust and sustainable financial foundation is crucial for the Nigerian manufacturing sector’s prosperity. The current credit squeeze could limit capacity utilization and technological advancement, emphasizing the importance of maintaining strong financial support for manufacturing to drive economic diversification and resilience against external shocks.”
He added that “while there are challenges, including high borrowing costs, the recent adjustments by the Central Bank of Nigeria (CBN) to lower the Monetary Policy Rate to 26.5 percent signal a positive direction towards disinflation. However, commercial lending rates still present hurdles for manufacturers.
“As of May 2026, prime lending rates averaged 27 percent, with maximum rates reaching 35.6 percent, limiting access to essential long-term financing for capital expenditures.”
To enhance access to financing, MAN DG said, “it is vital that government interventions, such as the N1 trillion Manufacturing Stabilization Fund, are effectively implemented. Expanding access to these funds for manufacturers of all sizes, rather than solely for large and liquid entities can create a more inclusive environment that nurtures burgeoning businesses and stimulates growth.”
