High Interest Rate Crippling Businesses Despite GDP Growth, AFBTE President Says

The President of the Association of Food, Beverage and Tobacco Employers (AFBTE), Mr. Chinedum Okereke, has said Nigeria’s high interest rate regime is crippling businesses. He spoke at the association’s 47th Annual General Meeting (AGM) held recently in Lagos.

Okereke noted that the country recorded a 3.87 per cent GDP growth in 2025. But manufacturers continued to battle harsh operating conditions. These include high borrowing costs, multiple taxation, inflation and weak consumer purchasing power.

According to him, the Monetary Policy Rate (MPR) stood at 27 per cent for most of 2025. That worsened the financial burden on businesses across the country.

“The huge increases over time in the past translated to high cost of borrowing, i.e., high interest rate, a development which evidently increased the debt burden of businesses and in like manner reduced their margins,” Okereke stated.

He noted that although Nigeria’s economy recorded modest growth and inflation slowed considerably during the year under review, ordinary Nigerians and businesses were yet to feel meaningful relief.

“Despite these reductions, there has been an upsurge in the cost of living in the country, especially the cost of food and other basic items,” he said.

Okereke attributed the persistent rise in food prices and living costs to the removal of fuel subsidy, naira depreciation, rising energy prices, poor infrastructure and insecurity in farming communities.

“The reasons for this are not far-fetched. They include the expected impact of the removal of fuel subsidy and the floating of the Naira, resulting in a high cost of logistics, particularly transportation,” he explained.

The AFBTE president further blamed insecurity in Northern Nigeria for worsening raw material shortages and increasing production costs for manufacturers.

“The insecurity consistently resulted in our members not being able to have easy and speedy access to their needed raw materials for production and, in like manner, market for the sale of their finished goods,” he said.

He also decried the burden of excessive taxes and levies imposed on businesses by government agencies. He described many of the charges as arbitrary and anti-business.

“What is even more disturbing is the penchant for imposing these fees without any consultation with those who are required to pay them,” Okereke lamented.

According to him, businesses were still struggling with overregulation, policy inconsistencies, foreign exchange pressures and high operational costs despite reforms introduced by the Federal Government in 2023.

“Operational efficiency is still under huge threat because of the very high operating cost coupled with the incessant disruptions occasioned by the change in regulations and policies, the overbearing posture of regulators, unfavourable laws, all of these at various levels of Government,” he stated.

While acknowledging improvements in exchange rate management and foreign reserves, Okereke maintained that the manufacturing sector remained weak. Only marginal growth was recorded in 2025.

“The overall growth rate of the sector was put at 1.4% compared with 1.2% in 2024,” he noted.

He, however, commended some government initiatives, including the Nigeria National Single Window project and the Central Bank of Nigeria’s Electronic Foreign Exchange Matching System (EFEMS). He said they had improved transparency and efficiency in trade and foreign exchange transactions.

On the controversial plan to ban alcoholic beverages in sachets and small PET bottles, Okereke urged the Federal Government to reconsider the move. He called for evidence-based policymaking.

“We would like to draw attention again to the fact that we are in the age of data and data analytics, which require evidence-based actions on issues,” he said.

The AFBTE president called on the government to provide incentives and relief measures for businesses. He also urged it to reduce excessive taxation and sustain dialogue with the private sector to protect investments and jobs in the country.