The Manufacturers Association of Nigeria has expressed concerns about the high interest rates set by banks. They noted that manufacturing exports decreased massively dropping from N1.04 trillion in the third quarter of 2024 to just N294.43 billion in the first quarter of 2025, which is a decline of N746.38 billion.

Data from the National Bureau of Statistics regarding foreign trade indicates that the value of manufacturing exports in Q1 2025 was N294.43 billion, which shows a considerable 40.43 percent decline from the N494.22 billion noted in the previous quarter.

The Director-General of MAN pointed out that the sector’s performance has worsened due to the effects of policy decisions, especially the 27.5 percent monetary policy rate, which has significantly compromised the sector’s sustainability.

He said, “The government’s monetary policy has negatively impacted manufacturers’ access to financing, and this challenge remains unresolved. The interest rate has been held steady at a rigid 27.5 percent, which is excessively burdensome for loans in manufacturing. This situation has continued.” Ajayi-Kadir also stressed that although manufacturers have responded positively to the stabilization of inflation and the reduction of foreign exchange rate hikes, the rates are still high, leading to a situation where manufacturing performance has not seen any notable improvement.

Recent stats show that manufacturers are still facing significant hurdles, even with the country’s impressive N5.17tn trade surplus. While manufacturing exports have seen a year-on-year rise of 9.58 percent from N268.70bn reported in Q1 2024, the sector has been on a downward trend since it experienced a sharp drop of 52.48 percent in Q4 2024.

In a statement released in May, the Director General of MAN gave his opinion about the manufacturing sector’s performance, calling it ‘sub-optimal.’ He noted that the industry has remained ‘lacklustre’ due to several issues, including an unstable exchange rate, insufficient power supply coupled with high energy costs, hyper inflation, insecurity, multiple regulatory agencies, and high compliance costs, along with elevated interest rates, limited access to credit, poor infrastructure, increasing logistics costs, unfavorable trade policies, and decreased patronage.

He expressed his disappointment about the sector’s poor performance in job creation and business sustainability, stating, ‘As of 2023, 767 manufacturing companies have shut down, leading to the loss of over 18,000 jobs in 2024 alone, all due to the difficult business environment.’

The Q1 2025 Foreign Trade in Goods Statistics report from NBS revealed that Nigeria’s total exports in Q1 2025 increased by 7.42 percent, reaching N20.59tn, up from N19.17tn in Q1 2024. Furthermore, on a quarter-on-quarter basis, the nation’s exports also experienced a growth of 2.92 percent compared to the N20.01bn recorded in Q4 2024.

Meanwhile, out of the total export value of N20.59 trillion, non-oil exports accounted for N3.17 trillion, which is equivalent to 15.38 percent of the overall exports. The data for Q1 2025 showed a 1.18 percent improvement from the Q4 2024 figures for non-oil products, which were recorded at N2.84 trillion or 14.20 percent of total exports.

The National Bureau of Statistics (NBS) reported that the value of imported manufactured goods reached N7.51 trillion, reflecting an 11.35 percent decrease from the N8.47 trillion noted in Q4 2024. However, when compared year-on-year, the value of imported manufactured goods increased by 30.90 percent from N5.74 trillion.

Consequently, the value of manufactured goods traded in Q1 2025 was N7.80 trillion, representing 21.67 percent of total trade. This sector saw a 2.83 percent decline compared to its Q4 2024 performance of N8.97 trillion, which accounted for 24.50 percent of total trade.

According to the NBS, Nigeria’s leading export commodity was unwrought aluminium alloys, exported to Japan and China, valued at N33.73 billion and N4.25 billion respectively. This was followed by dredgers worth N37.23 billion exported to Spain, and cathodes along with sections of cathodes exported to Japan and South Korea, valued at N11.34 billion and N8.59 billion respectively.

The report indicated: “The data showed that manufactured goods were mainly exported to Asia, valued at N103.34 billion, followed by exports to Africa at N83.13 billion and to Europe at N75.71 billion.

Imported manufactured goods primarily included motorcycles and cycles with auxiliary motors, petrol fuel, with a capacity exceeding 50cc but less than 250cc, and Completely Knocked-Down units imported from India, valued at N146.11 billion. It also noted that, “This was followed by machines for the reception, conversion, and transmission of voice, images, or data from China and the United States, valued at N120.15 billion and N12.06 billion respectively.

Other manufactured goods were polypropylene from Saudi Arabia was assessed at N83.31 billion, whereas the combined value of herbicides, antisprouting agents, and plants obtained from China and India reached N132.81 billion and N2.71 billion, respectively.