The manufacturing sector of Africa’s largest economy, Nigeria, continues to grapple with an all too familiar adversary in the form of high borrowing costs.
According to new data from the country’s central bank, manufacturing companies in Nigeria continue to face credit rates of up to 60%, which remains severely restrictive for industrial expansion.
This is despite the Monetary Policy Committee’s decision initiated by the Central Bank in February 2026 to lower the benchmark interest rate to 26.5%.
Back then, the governor of the Central Bank of Nigeria, Olayemi Cardoso, acknowledged the change following the MPC’s 304th meeting in the country’s capital, Abuja, stating that the rate had been cut by 50 basis points.
“The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5 per cent,” Cardoso said, the Punch reports.
The CBN governor added that the MPC resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45 per cent, Merchant Banks at 16 per cent, and 75 per cent for non-TSA public sector deposits.”
While the action was intended to encourage a steady decline in inflation and economic stability, it had little influence on real sector funding, notably in manufacturing.
For manufacturers, the facts on the ground reveal a different narrative.
Although some banks have cut their prime lending rates, the actual cost of credit remains unacceptably expensive.
Lending rate for Nigerian manufacturers in certain Nigerian banks
Prime rates for industrial borrowers range from 1 percent at Stanbic IBTC to more than 30% at many banks, including FCMB, Globus Bank, Keystone Bank, Polaris Bank, Unity Bank, and Wema Bank.
More importantly, the maximum loan rates, which many industries will eventually face, provide a harsher picture.
Stanbic IBTC leads the leaderboard with 60%, followed by FCMB at 46%.
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Union Bank and Unity Bank are at 37% and 38%, respectively, while Fidelity Bank, First Bank, Polaris Bank, and Sterling Bank are at 33 to 36%.
Even moderate lenders like Access Bank (25.5%), Ecobank (26.75%), and Guaranty Trust Bank (10%) keep their maximum rates between 32 and 33%, despite decreasing prime rates.
Merchant banks exhibit a similar pattern.
Coronation Merchant Bank offers a 9% prime rate with a 35% maximum, whereas FSDH Merchant Bank offers 7% and 30%, respectively.
These rates have a substantial impact on enterprises seeking long-term capital to finance machinery, extend production lines, or invest in local value addition.
