Taiwo Hassan 
The Manufacturers Association of Nigeria (MAN) has disclosed that local manufacturers’ finance costs totaled N1.3 trillion in 2024 following commercial bank lending rates to manufacturers surging to 35.5 per cent from 28.06 per cent in 2023.
The Director-General of MAN, Mr. Segun Ajayi-Kadir, who stated this in a MAN report released in Lagos recently, said that the cost of finance incurred by manufacturers consequently constrained investment and expansion plans in the country.
According to him, “rising interest rates posed a major financial burden, with commercial bank lending rates to manufacturers surging to 35.5 per cent in 2024 from 28.06 per cent in 2023.
“This was driven by continuous CBN rate hikes, which raised the MPR to 27.50 per cent. “Consequently, manufacturers’ finance costs totaled N1.3 trillion, constraining investment and expansion plans.”
Ajayi-Kadir, while also speaking on manufacturing investments, explained that real manufacturing investment fell by 35.3 per cent yearon-year to N658.81 billion in 2024, reflecting economic uncertainty and reduced expansion plans.
However, he noted that second half of the year 2024 witnessed a 19.4 per cent increase compared to first half, as manufacturers cautiously resumed capital expenditures.
“In nominal terms, total investment declined by 11.3 per cent to N2.85 trillion, with Land & Buildings and Furniture & Equipment seeing the most significant declines,” he stated.
On raw material sourcing, the MAN DG pointed out that the manufacturing sector’s local raw material sourcing increased to 57.1 per cent in 2024, up from 52.0 per cent in 2023.
“This shift was largely driven by forex scarcity, high import costs, and government incentives promoting local content.
Notable improvements were observed in Wood & Wood Products, Textile, Apparel & Footwear, and Chemical & Pharmaceuticals, while Electrical & Electronics continued to lag due to dependency on imported components,” he added.
While reacting to employment in the manufacturing sector, Ajayi-Kadir stressed that the employment situation in Nigeria’s manufacturing sector remained relatively stable in 2024, with 34,769 jobs added, a 1.8 per cent increase from 34,163 jobs in 2023.
However, he highlighted that the number of employees leaving manufacturing companies also increased from 17,364 in 2023 to 17,949 in 2024, indicating ongoing labour mobility due to economic uncertainties, skill migration, and company restructuring.
This resulted in 16,820 net new jobs in 2024, nearly unchanged from 16,799 in 2023. On the global economy for the manufacturing sector, the MAN boss explained that the global manufacturing sector experienced uneven growth in 2024, with Q3’24 data reporting a modest 0.4 per cent increase in output.
According to him, “Latin America and the Caribbean emerged as the fastest-growing region, expanding by 1.7 per cent, while Europe and North America contracted due to high production costs and subdued consumer demand.
“China maintained steady industrial growth, whereas Africa’s manufacturing sector showed signs of improvement, growing by 0.6 per cent, albeit with uneven performance across key economies, including Nigeria.”
