Manufacturers Shun Bank Loans Over High Interest Rates
Faced with persistently high interest rates, leading Nigerian manufacturers have drastically reduced bank borrowings by 20.3% in the first nine months of 2025, dropping to ₦2.014 trillion from ₦2.526 trillion during the same period in 2024. Industry giants like BUA Foods, Nestlé Nigeria, and Nigerian Breweries led the reduction, instead turning to funding sources like equities, bonds, and retained earnings. This shift has sharply cut overall finance costs by 52.8%, saving the sector ₦662 billion. The move has also coincided with a rebound in profitability—manufacturers posted ₦2.5 trillion profit in 2025, recovering from a ₦116 billion loss in 2024, though cost of sales surged by 57.9%. Analysts note that high credit costs, with lending rates often above 30%, are driving firms to alternative funding and delaying expansion plans. Experts suggest that, while improved profits are positive, the trend strains the […]
