BREAKING NEWS: High Interest Rates Cost Manufacturers N730bn, As Unsold Products Hit N1.24trn

LAGOS – The Manufacturers Asso­ciation of Nigeria (MAN) has attributed the N1.24 trillion value of unsold goods to rise in the Monetary Pol­icy Rate (MPR) to 27.25 per cent by the Central Bank of Nigeria (CBN)....For More READ THE FULL STORY▶▶

The Director General, Segun Ajayi-Kadir of MAN, who made the disclosure to Daily Indepen­dent, said the MPR rate impact goes beyond compounding the challenges of manufacturers as it is stifling opportunities for in­vestment in crucial areas such as technology, retooling, and expan­sion within the manufacturing sector.

“With the increase in borrow­ing costs, manufacturers will now pay over 35 per cent on their credit facilities. This will lead to an in­crease in production costs, high­er prices of finished goods, lower competitiveness and production capacity expansion.

“Manufacturers will, all the more, be compelled to choose to service existing credit facilities over expansion and investment in new product lines. For in­stance, over the first six months of the year, manufacturers incurred more than N730bn in capital expenses due to the continuous rise in interest rates imposed by commercial banks.

“The value of unsold finished goods inventory surged by 42.93 percentage points, reaching N1.24 trillion compared to N869.37bn at the close of 2023.

“This underscores the diffi­culties manufacturers face in a weakening market.

“In broad terms, MAN is wor­ried about the implications of the continuous rate hikes on the productive sector and earnestly expects the CBN to stop the rate hike but explore more of the mon­etary-fiscal policy handshake op­tion to curb inflation”. The association bemoaned the MPR hike while urging the government to accelerate the disbursement of the N1tn sin­gle-digit loan plan for the sector.…For More READ THE FULL STORY ▶▶