Manufacturers and economic analysts have called for a reduction in commercial lending rates following the Central Bank of Nigeria’s decision to cut the Monetary Policy Rate from 26.5 per cent to 23 per cent.
The 350-basis-point reduction, announced after the Monetary Policy Committee meeting on September 22, 2026, was described by business groups as an opportunity to reduce the cost of capital, stimulate investment and strengthen economic activity.
However, stakeholders said the benefit of the MPR reduction would depend largely on whether commercial banks transmit the lower policy rate to borrowers through cheaper loans.
The Executive Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said commercial lending rates had remained too high for businesses, particularly those in manufacturing, agriculture, construction and logistics.
Yusuf urged banks to progressively reduce lending rates on both new and existing credit facilities, warning that without meaningful transmission, the impact of the policy adjustment on investment and economic growth would be limited.
Similarly, the Director-General of the Lagos Chamber of Commerce and Industry, Dr Chinyere Almona, described the MPR reduction as good news for manufacturers and the wider business community, particularly micro, small and medium-sized enterprises that have been constrained by high borrowing costs.
She, however, cautioned that a lower MPR would not automatically translate into cheaper or more accessible credit, noting that the transmission from the policy rate to actual lending rates remained critical.
The Manufacturers Association of Nigeria has also called for deeper reductions in borrowing costs, arguing that some manufacturers could still face prime lending rates of between 27 and 30 per cent despite the MPR being reduced to 23 per cent.
MAN Director-General, Segun Ajayi-Kadir, said manufacturers needed further cuts to make Nigerian businesses more competitive, while also calling for measures to improve liquidity and expand access to affordable financing.
Stakeholders further identified high energy and logistics costs, exchange-rate risks, infrastructure deficits, multiple taxes and other business risks as factors that could limit the impact of cheaper monetary policy on the real sector.
The LCCI therefore called for stronger credit guarantees and other de-risking mechanisms to encourage banks to lend to viable businesses, particularly SMEs, while maintaining prudent lending standards.
The CBN Governor, Olayemi Cardoso, has described the MPR reduction as a “reset and recalibration” aimed at strengthening monetary-policy transmission rather than a shift to an accommodative policy stance. He said the apex bank would maintain a restrictive stance for as long as necessary.
With the benchmark rate now at 23 per cent, attention is expected to shift to commercial banks and whether the policy adjustment will translate into lower borrowing costs for manufacturers and other productive sectors.