MAN welcomes CBN interest rate cut to 23%

The Manufacturers Association of Nigeria (MAN) has expressed satisfaction with the Central Bank of Nigeria's recent decision to lower the Monetary Policy Rate by 350 basis points to 23 per cent, citing it as a positive development that eases financial burdens on businesses. Segun Kadir, the Director General of MAN, stated that the reduction in the interest rate indicates a shift away from the restrictive monetary policy that has hindered manufacturing growth.

Kadir anticipates that the lower interest rates will lead to reduced borrowing costs and increased access to working capital, inventory financing, and investment funds. However, MAN cautioned that the advantages may be constrained by the constant Cash Reserve Ratio of 45 per cent for Deposit Money Banks. The association advocated for a gradual reduction in the high Cash Reserve Ratio to enable more deposits to be available for lending to the real sector, provided that financial stability is not jeopardized.

MAN also urged for improved coordination between monetary and fiscal authorities, single-digit concessionary financing for manufacturers, and steps to ensure that banks pass on the rate cut to lower commercial lending rates.