MAN Seeks N1trn Fund Release To Ease Manufacturing Finance, Energy Costs

By Olumide Johnson 

The Manufacturers Association of Nigeria (MAN) has renewed its call for the federal government to release the N1 trillion manufacturing stabilisation fund promised under its Economic Stabilisation Plan, as local producers contend with high financing, energy and operating costs.

DEVELOPMENT:

Director-General (DG) of MAN, Mr. Segun Ajayi-Kadir, made the call at the recent BusinessDay Go Local Summit 2.0 in Lagos. He was represented by Segun Osidipe, Director of Research and Economic Policy Division at the association.

Ajayi-Kadir said that the fund should be channelled through the Bank of Industry (BOI) to enable manufacturers access affordable financing.

“That support came. Ironically, this same government promised this, I think about two years back, in its Economic Stabilisation Plan. But today, that fund is yet to be made available,” he said.

He called for strict disbursement guidelines and a defined timeline to limit bureaucratic delays.

“We need to make that available, $1 trillion Manufacturing Stabilisation Fund, through the Bank of Industry (BOI). They are our partner,” he said.

“We have confidence that if it’s released to Bank of Industry, we will be able to get it as fast as possible.”

DATA:

Ajayi-Kadir said that energy costs now account for as much as 50 percent of manufacturers’ overhead, with manufacturers spending N1.34 trillion on alternative energy sources in 2025.

He also said that more than N2 trillion worth of finished products were sitting in warehouses because of weak demand.

MAN is seeking quarterly reductions of 200 to 300 basis points in benchmark interest rates over the next two years, with the objective of enabling BOI refinancing at seven to nine percent.

SIGNIFICANCE:

The manufacturers’ position highlights three immediate constraints on industrial competitiveness: expensive credit, high energy costs and weak consumer demand.

Ajayi-Kadir also called for a dedicated foreign exchange window for manufacturers to access critical raw materials and heavy machinery unavailable locally.

He further advocated zero duties on completely knocked-down (CKD) and semi-knocked-down (SKD) assembly kits.

“CKD and SKD must be zero-rated. The four percent FOB charge should be replaced with a capped service fee and import adjustment taxes on non-locally available inputs should be eliminated entirely,” he said.

NEXT MOVE:

The immediate watch point is whether the N1 trillion stabilisation fund is released and how any disbursement framework is structured.

OUR LENS:

MAN’s intervention suggests that manufacturers see financing support as only one part of the competitiveness equation. The combination of expensive credit, energy costs, foreign-exchange constraints and weak demand is affecting both production economics and inventory accumulation.

The deeper issue is whether policy support can reduce the cost of production sufficiently to restore manufacturing investment, output and market demand.

Olumide Johnson is a journalist, reporting on energy, maritime, business, and developments shaping Nigeria’s economy.