Nigerian manufacturers are prioritising debt repayments over new investments, allocating a staggering N6.02 trillion to loans in 2024—more than double the amount invested in capital projects. With borrowing costs soaring, companies face a tough choice: safeguard liquidity or expand.
- Manufacturers allocated N6.02 trillion to debt servicing, surpassing N2.74 trillion in capital spending.
- High borrowing costs have made debt repayment a priority over expansion for most firms.
- Major players like Dangote Cement and MTN Nigeria face severe liquidity pressure.
- Smaller firms are struggling most, with fewer resources for future growth.
- Policymakers face mounting pressure to reduce borrowing costs and restore access to affordable capital.
Rising borrowing costs, now at up to 42%, have forced manufacturers into a difficult balancing act: pay off loans or grow. Larger companies may weather the storm, but for smaller manufacturers, the consequences could be dire—long-term stagnation and reduced competitiveness. Without policy changes, this could mean lost opportunities for Nigeria’s manufacturing sector.
As firms tighten their belts, the future of Nigeria’s manufacturing industry hangs in the balance. Can policymakers step in to ease the pressure before the damage is done?
