Manufacturers ask CBN to reduce interest rate on industrial loans to 1%

Bioku Rahman, the outgoing chairman of the Manufacturers Association of Nigeria (MAN) for Kwara and Kogi, has asked the Central Bank of Nigeria (CBN) to reduce the present interest rate on loans for its members.

Rahman spoke on Tuesday in Ilorin, Kwara state, during the association’s 10th annual general meeting (AGM).

The meeting was themed ‘Tackling the Challenges of the Manufacturing Sector: A Win-Win For Government and Local Manufacturers’.

On July 23, CBN raised the monetary policy rate (MPR), which benchmarks interest rates, to 26.75 percent — from 26.25 percent.

In its second quarter (Q2) ’24 MAN CEO’s Confidence Index (MCCI),’ MAN said commercial banks charge an average maximum lending rate of 35 percent on loans to its members between April and June.

Speaking at the AGM, Rahman said the present “interest rates are killing businesses”.

“We therefore ask the federal government to urgently direct the CBN to drastically reduce interest rates on industrial loans,” he said.

“The CBN should also direct commercial banks to reduce interest rates on industrial loans.

“The interest rates charged on industrial loans and other loans released as COVID-19 palliatives should be significantly reduced further to one percent.”

‘WAIVE CONDITIONS ON FX FOR MANUFACTURERS’ 

Also, Rahman asked the CBN to waive conditions on foreign exchange (FX) policies for local manufacturers.

“Similarly, CBN can widen the window of foreign exchange to local industries, while urging the federal government to harmonise taxes and levies at federal, state and local government levels.”

He also urged the Bank of Industry (BOI) to approve and urgently roll out further reductions in its lending rates to industries.

Rahman added that a heavy-duty gas-energy generation and distribution plant was exclusively needed for Kwara industrialists.

On her part, Damilola Adelodun, Kwara state commissioner for Business, innovation and technology, said the government will continue to support the association to boost the state’s economy.

Adelodun, who represented AbdulRahman AbdulRazaq, governor of Kwara, reiterated the government’s resolve to create a conducive environment for the manufacturers in the state.

“The state has undertaken several key initiatives to support the manufacturing sector and overall economic development,” she said.

“The Urban Renewal Initiative is transforming the architectural landscape of Kwara to enhance its aesthetic appeal and functionality, making it a more attractive place for businesses and residents.

In his address, Francis Meshioye, president of MAN, described the relationship between the state government and manufacturers as cordial.

Meshioye also appealed to the state government to upgrade the infrastructure around the industrial estates.