The Manufacturers Association of Nigeria (MAN) has expressed concern that the Central Bank of Nigeria’s (CBN) continued use of tight monetary policy is harming the competitiveness of Nigerian products in the global market.

MAN’s Director General, Segun Ajayi-Kadir, voiced this concern following the CBN Monetary Policy Committee’s decision to raise the Monetary Policy Rate (MPR) by 200 basis points to 24.75 percent from 22.75 percent at its 294th meeting on March 25th and 26th, 2024.

Ajayi-Kadir expressed concern over the decline in Nigeria’s manufacturing export value over the last five years, noting a 166 percent drop to N778.44 billion in 2023 from N2.07 trillion in 2019. He also highlighted a 57.6 percent decrease in the share of manufacturing export to non-oil export, which fell to 24.8 percent in 2023 from 82.4 percent in 2019.

Regarding the implications of the MPC’s decision on the manufacturing sector, Ajayi-Kadir stated that the continuous adoption of the same monetary policy pattern over the last two years has led to macroeconomic instability, significantly impacting Nigeria’s manufacturing sector. He emphasized that this situation is worsened by various constraints affecting the sector’s performance.

Furthermore, he mentioned that the higher cost of doing business, exacerbated by the MPC’s decision, is diminishing the competitiveness of Nigerian products in the global market. This is evident in the significant reduction in global demand for Nigerian products. Ajayi-Kadir cited data from the World Trade Organization, showing that South Africa’s manufacturing export value was $46 billion, significantly higher than Nigeria’s $3 billion in 2022.

He emphasized the need for the MPC to carefully consider the potential impact of its decisions on manufacturing, acknowledging that while the decisions aim to address economic challenges, they must be mindful of their effects on the manufacturing sector.